Getting your finances under control and relieving yourself of suffocating debt stress is possible. With National Debt Support, you can find 7 ways to deal with debt stress, you can take back control of your life and start planning for a financially-free future today. 

1. Make Healthy Life Choices

Sometimes when you get into seriously stressful situations, it is easy to let it get the better of you. The all-consuming problem of debt stress can mean that you stop doing things for yourself, like staying active and having a social life. 

When you are dealing with stress, it is important to keep up some levels of exercise. Exercise offers many health benefits — and it pumps you full of “feel-good” endorphins, stopping you from focusing on your financial troubles. 

Maintaining an active social life should also be a priority when dealing with stressors. Debt can already leave you feeling alone and the last thing you want to do is isolate yourself from your friends and family. It is always a good idea to confide in those around you and never be afraid to ask for help if you need it. And maintaining contact doesn’t have to cost the earth – a phone call to check in, an invitation for a catch up or meeting for a quick coffee all make a difference, and all can be relatively inexpensive.

Finally, never turn to coping mechanisms like alcohol — an expensive way to dull the senses that will only exacerbate your anxiety. You will feel so much better if you can be kind to your body and maintain a healthy lifestyle.

2. Understand When Stress Is Getting to You

Although stress is something we all experience, many people struggle to spot it or even understand it. It is therefore important to look for signs that you could be experiencing an unhealthy level of stress and anxiety. The following signs are a major indicator of debt stress:

• The thought of debt makes you feel ill
• Your sleep pattern is impacted and you find yourself feeling exhausted
• You don’t want to see or speak to friends or family
• You struggle to concentrate on tasks at work 
• You feel overwhelmed.

3. Accept the Situation

When struggling with debt, there is nothing to be ashamed of. Even today, there is sometimes a stigma attached to debt when it is a problem that will impact many responsible, good people. Debt is extremely common, with over 10 million South Africans estimated to be over-indebted, you are not the only one who is struggling with debt. This is why accepting your situation and taking action shouldn’t be something to be ashamed of. 

When accepting the situation you are in, it is also important to try and take as much responsibility as possible. Accepting responsibility for your debt can help you overcome the issue and empower you to take action.

4. Seek Support

If debt-related stress is getting to you, you must get support. If your friends and family can’t help you through this difficult time, you should consider getting in contact with National Debt Support.

If you have been dealing with anxiety and stress and you cannot see the light at the end of the tunnel, it is important to get medical help immediately and contact your local GP. Your doctor can offer advice and point you in the direction of psychological therapy services near you. It is important to know that there are many people and services out there to help you.

5. Get Professional Advice

Remember that you don’t have to do everything by yourself. We know financial problems affect good people and here at National Debt Support, we are here to help. We offer professional debt advice and solutions that will help you take back control of your finances.

With National Debt Support debt guidance, you will find all the information and advice you need to manage your debt and start making better financial decisions. 

 6. Put Debt Stress in Perspective

Money isn’t everything and even when it feels like it is, it is important to realise that the worst-case scenario isn’t that bad and that many others before you have faced the same challenge but tackled it and are on the road to financial freedom. Also remember, you won’t be the last person to encounter financial difficulty – and by taking action you may be able to offer support to someone else in the future, as someone who has been there and understands first hand. National Debt Supportis able to provide you with advice.

7. Make a Plan

Finally, it is important to come up with a plan to manage your finances. Take a look into your finances, try to figure out where you can save money and how you can possibly earn a little extra income on the side. 

Budgeting is a great way to keep track of your finances and understand what you can afford to repay. Once you start taking control of your finances, managing that debt doesn’t look like such an impossible task. Check out National Debt Support budgeting tips and learn how to be smarter with your money.

Although the global pandemic has had a huge impact on everyone’s finances, debt stress is something that no one should suffer. Be aware that your money worries are not unusual and you shouldn’t be embarrassed to ask for help. It is important to remember all the things you can be grateful for and know that help is always at hand.

Are you struggling with debt stress? National Debt Support can help you manage your debt with a Debt Review. Request a free call back today and feel the weight lifted from your shoulders.

What Is Good Debt?

Good debt is a debt that will benefit your future or enable you to become financially better off further down the line. For example, a sensible investment such as a mortgage to purchase a home or as a solid investment is good debt. Mortgages are often cheaper per month than rent, and once paid off, the home is yours and you can live mortgage/rent-free. Additionally, when purchased as an investment, you can even make money by selling the property further down the line.

Student loans are also considered good debt. Graduates have far better job prospects and a higher likelihood of earning a bigger salary. The same goes for investing in other kinds of further education or training courses.

If you run or own your own business, investing in it so that it can grow would be considered good debt too. If you have a solid business plan and put in the hard work needed for it to become a success, your business could eventually be worth a lot more money than the loan you originally took out to expand it.

What Is Bad Debt?

In contrast to those good debts, bad debt is one that drains your resources in repayments, will not “pay for itself” in the future and does not benefit your professional development. Bad debt may even put you in a position whereby you cannot afford your usual lifestyle or default on usual bills due to the unaffordable repayments.

Debt is usually considered to be “bad debt” when it is unaffordable to the individual. Many unnecessary items — such as cars or luxury holidays — are also considered bad debt because they either depreciate in value immediately or hold no value at all. However, the kind of debt that is considered a real “no-no” is borrowing money to repay debt, unless you consolidate your debts and no longer spend on the lines of credit you have cleared. If you are struggling to reach the end of every month and have tried budgeting to no avail, take a look at our information on Debt Review or contact us for more information.

How Much Is Too Much Debt?

A great way of keeping an eye on your finances, and whether you should apply for that credit purchase or save up for it the old fashioned way, is to work out your debt-to-income ratio (DTI).

A debt-to-income ratio (DTI) is one of the many factors that lenders look at when making a decision on your lending criteria. But it’s not just lenders that should be interested in this. Your DTI will help you to monitor your income and expenses, get a better understanding of where you may need to cut back and where you may have some flexibility!

How to Work Out Your Debt-to-Income Ratio (DTI)

1. Add up all of your monthly debt payments. This should include mortgage payments, loans, store credit, student loans, credit cards and any other form of debt. It may be a good idea to add an estimated payment amount for a loan you are considering to this total. This way, you will get a true reflection of your DTI after this new debt is added.
2. Now add up your total income. Include your gross monthly income, any child benefit and anything earned through freelancing.
3. Divide your monthly debt by your monthly income and multiply by 100. The result is your DTI as a percentage

Income ÷ Debt x 100 = DTI

Debt in South Africa

An April 2020 report from TransUnion provides context as to how much South Africans owe on outstanding loans.

The report shows that:

• The average South African owes R19,265 on their credit card account, while the average credit line (the amount of credit a person may borrow from) is R32,973.
• The average outstanding amount on home loans is  R514,938.
• The average outstanding amount in vehicle financing loans is R187,193.
• The average outstanding amount on personal loans is R36,835.

If you are concerned about your level of debt and your ability to keep up with your repayments, don’t hesitate to contact National Debt Support today to chat with one of our friendly advisors, who will assess your situation and give professional, non-biased guidance.

How to Manage Debt

Sometimes, managing debt can be easier said than done. There may have been some unforeseen circumstances such as a job loss or a relationship breakdown, or you may have had to borrow more money than you intended due to an unexpected expense.

Take a look at our budgeting ideas to get top tips for managing your money to get yourself back on track. If you would like further information or guidance, request a free callback to speak with one of our expert guides today.

How to Get Out of Debt

If Debt has become a problem and it has gotten to the point that you are missing payments or being chased by debt collection agencies, contact National Debt Support today. Our friendly expert guides will help you to understand your options when it comes to managing your debt and whether you could benefit from Debt Review. So call today and begin your journey to financial freedom

Here at National Debt Support, we understand that debt is difficult to deal with both financially and emotionally. It can sometimes feel like an isolating experience you want to keep secret, but it is essential to remember that nothing is embarrassing about financial difficulties. At National Debt Support, we understand that bad debt happens to good people, and that is where our expert advice and professional services can help lighten your burden.

As we start to see the beginning of the end of the coronavirus pandemic, now is the time to regain control of your financial future and follow our 6 tips for getting out of debt.

1. Write down Your Debts and Prioritise Them

The first step to tackling your debts is to make a note of all the money you currently owe. This can seem like a daunting task but believe us, facing your responsibilities head-on is the only way out of financial difficulties. It is also essential to write down all the money you currently owe so that you can keep track of it all and not miss your repayment periods.

Prioritise debts that need to be paid back first, once you have a record of them,  work out which ones you have a little more wiggle room with.

Prioritising your debts doesn’t just mean paying back the largest amounts first. Instead, make sure that you keep up to date with important payments like your rent, mortgage or utility bills to ensure that you continue to have a roof over your head, water and electricity.

Next, you should pay off the debts with the highest interest rates to not pay back way more than you have to.

2. Make a Budget or Spending Plan

It is important to know exactly how much money you have coming in and how much is going out. It is usually due to poor budgeting that many people find themselves in debt in the first place.

Once you understand your finances, you can start making a budget or a spending plan. Look at your income and try to find ways to limit your spending. Is it possible to cut down on your phone bills or morning coffees? If so, this is a great place to start. After that, you can look around for cheaper alternatives to the services you already use. Many of us don’t even realise that we are paying more for our utilities or television plans than we need to be.

Developing a smarter spending plan will leave you with more cash in your pocket at the end of the month.

3. Look for Extra Income

If you find that your regular income doesn’t cover your outgoings, it might be an excellent time to explore the option of gaining an extra income.

You can do this in a couple of different ways. First of all, you can look to work more hours or pick up another job on the weekends. This could be a huge help for many people when getting out of debt, even if it is just a short term solution that could stop you from paying large amounts of interest.

4. Take Care of Your Mental Health

Although it may not be a tip for getting out of debt, it is of the utmost importance to remember to look after your mental health and emotional well-being if you’re suffering financial difficulties.

It is common for people to feel a considerable amount of shame and isolation due to debt stress. Debt, however, is not something to feel embarrassed about. Make sure you get professional medical help if you find it too much to cope with, and continue making healthy choices, such as meeting up with friends and family and maintaining your exercise routine. Only when you are in a good place mentally will you be successful in getting out of debt.

5. Get Professional Help

It is always okay to ask for help. However, getting out of debt can be complex and sometimes, professional experience is required. National Debt Support can offer expertise, debt guidance and solutions to help you take back control of your financial future.

6. Consider Your Debt Solutions

Debt Review

Debt Review is a government legislated process that forms part of the National Credit Act 34 of 2005 (NCA) which was created to help and protect people who are struggling to meet their monthly debt repayments.

Under Debt Review, your debt counsellor will formulate a new affordable monthly repayment plan by taking into account all of your income and expenses. Your debt counsellor will then negotiate with your creditors to reduce your monthly repayments (in some cases by up to 50%). Your debt counsellor will aim to ensure that your interest rates, as well as your monthly repayments are reduced, helping you pay back your creditors and become financially free within a period of 60 months or less.

Debt Review enables you to manage your costs of living and regain your financial freedom. Read our blog explaining all of the benefits of Debt Review.

If you are struggling to pay your debts, National Debt Support is here to help you manage your debt. Request a free call back today and learn how to manage your money better.

Should your financial position change while under Debt Review, you will be able to either pay larger amounts, or even a lump-sum payment. Both of these options will allow you to conclude the process in a shorter time frame.

What Happens After Debt Review?

Upon starting the Debt Review process, your debt counsellor will all let credit bureaus and your credit providers know that you are officially under Debt Review. Your credit profile is then flagged as ‘Under Debt Review’ and you will not be able to take out any more credit for the remainder of the process, this is so that you are able to pay off all your debt without incurring more debt in the process.

After your debt is completely paid off, you will have completed the Debt Review process and you will be financially free! Your debt counsellor will then notify the credit bureaus that you are no longer under Debt Review. You will be issued a clearance certificate (form 19) to confirm that you have completed the Debt Review process so you can start rebuilding your credit score.

In terms of the National Credit Act (NCA), the credit bureaus are legally required to remove the ‘under debt review’ flag from your profile within 21 business days if being notified that you have completed the Debt Review process.

Can I Buy A House After Debt Review?

Debt Review does not prevent you from purchasing a house once you have completed the process. You will be able to buy a house after Debt Review. Once the credit bureaus have unflagged you, then you will be able to apply for credit again and make purchases under credit, whether that be for a car or a house, ect. You will, however, need to build up your credit score which may take some time.

At National Debt Support, we provide non-judgemental debt advice, tailored to your circumstances, to relieve the burden of financial stress. Stop feeling worried and powerless. Take control of your finances so you can live your best life again. Please feel free to contact us today, we are here to help you in your journey to financial freedom.

The National Credit Act (NCA)

In simple terms, Section 80 of the NCA states that a credit agreement will be considered to be reckless if the credit provider:

• Failed to conduct an affordability assessment before entering into the agreement with the consumer. The credit provider must do a credit check.
• After conducting the assessment, the credit provider entered into the agreement, despite the fact the credit agreement would render the consumer over-indebted.
• The consumer did not understand and acknowledge the risks and costs for obligations of the credit agreement.

A consumer is considered to be “over-indebted” if he/she is unable to meet their financial responsibilities or pay their creditors in a timely manner, in terms of their credit agreements.

A credit agreement can only be deemed reckless if there was no dishonesty by the consumer in their credit application, specifically with regards to the declaration of their income and expenditure.

What Are The Consequences Of Reckless Lending?

Section 80(3) of the NCA strictly prohibits a creditor from entering into a reckless credit agreement with a consumer. The act states that if a reckless credit agreement is entered into, a court may declare the agreement as reckless. If a court declares a credit agreement reckless, the court may:

• Set aside all or part of the consumer’s rights and obligations under the agreement, or
• Suspend the force and effect of the credit agreement until a date determined by the court.

Should a credit provider conduct an eligibility test and conclude that entering into the proposed credit agreement would cause the potential consumer to become over-indebted, but still enters into the credit agreement with the consumer, the credit agreement will be classified as reckless.

How Can National Debt Support SA Help?

Bad debt often happens to good people, if you are struggling to pay your monthly repayments, you could be over-indebted and may even qualify for Debt Review.

As part of the Debt Review process, our team at National Debt Support SA does an in depth credit check on your behalf, to determine if any credit agreements could be classified as reckless. If we suspect any reckless lending there is a possibility that the debt can be written off.

Our goal is to help you in your journey to financial freedom by reducing your monthly instalments and interest rates by up to 50% and legally protecting you and your assets from debt collector harassment and repossession. We are here to empower you to take control of your debt, and find financial freedom through our process of providing professional debt advice and solutions. Please feel free to contact us.