Tips on Debt Management

How to Get Your Debt Under Control

Disaster has struck, and you’re in the deep end. You have to rebuild our life, but your debt seems to keep growing and it feels like you’re sinking. What do you do?

For Alfred Nyani, this seems a little too familiar. A few years ago, Alfred’s life changed forever when his house burned down in the middle of the night. He and his family lost everything but the clothes on their backs.

For Alfred it felt like a hopeless situation at first. No plan, no idea what to do next, and debt still hanging over his head. But his light came, and Alfred managed to rebuild his home, and life, because of the generosity of his friends, family and co-workers.

When it came to his debt, Alfred took ownership of his situation and sought guidance to help him implement his own strategies. Today he has straightened out his debt and is back on track to a stronger credit standing. 

Throughout this process, Alfred considered many different options to manage his debt. What follows are some useful points he collected that may help you make an informed decision about your debt situation.

1. Do it yourself. Chat to friends and family, do some online research, and formulate your own plan to manage your debt better. Remember to set realistic goals and be a little strict with yourself!

2. Consolidate your debt. Bringing all your debts together with one creditor could make it seem immediately more manageable. 

3. As a last resort, you could consider debt counselling. This is the process by which an over-indebted person restructures their debt in order to better keep up with repayments. But there are some important things to remember before you take this option:

  • You won’t be able to access further credit whilst under debt review, and your debt review will be noted on your credit record.
  • Your credit score more than likely will be negatively affected.
  • Your debt counsellor will negotiate with your credit providers and you may be granted an extended repayment term, reduced interest rate and a monthly instalment that you’ll need to pay to a payment distribution agent.

Whether you take the more formal route of Debt Review or, like Alfred work to solve your own problem, it will require sacrifice and commitment, but like Alfred, you will survive and come out of it stronger.

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