Originally written by Tony Webbstock.
There are a few available options for debt relief in South Africa.
Some of them are legal processes, and others are processes that have evolved with time.
Let’s first look at the evolved processes –
1) Making informal arrangements with the creditors.
2) Taking on the creditor’s legal representative with ‘legal formalities, ’ and,
3) Simply not paying the debt.
These processes have a high risk to you because you are at the mercy of the creditor’s legal system.
Nasty things happen, like salary garnishes and the loss of homes and vehicles.
The Legal Processes
- Debt review and
- Administration.
Here you are actually appointing ‘someone’ to deal with your debt relief, thereby creating more debt because now you need to pay someone’s salary.
Both of these processes are delaying the pain of debt. There is no end in sight, and then the depression and health risks set in.
Sequestration
- Voluntary Surrender of your Estate.
Sequestration, Bankruptcy, and Insolvency are a few other terms for the same process.
This is a legal process and is the only way to have your debt written off legally.
You get an honest new beginning in life.
There are many stigmas attached to the process because, in days gone past, life after sequestration was relatively restricted. About 50 years ago, when money meant something and was an actual currency, the creditors saw a “previously sequestrated’ individual as a risk to finance.
Today, however, creditors make money by giving money. They will beg you a day after your Rehabilitation to provide you with more debt. The system needs you to be part of the debt cycle.
Emotional Guilt
Another issue is emotional guilt.
This comes from how we were brought up. Our parents and society taught us – You must be honest and pay your debt. However, life happens to good people, and when we cannot pay our debt, there is no sympathy from the creditors. Only unlimited interest is calculated.
There is also the issue of losing your name.
No one calls you John Smith during the process.
The disadvantage of the process is you lose your legal trading name, which means you cannot access any debt but can still sign contracts, get married, have babies, and do all the things humans do.
You actually get to be a human again because you are not part of the system.
However, not everyone can apply for Voluntary Surrender of their estate, and some people have too much to lose.
Making wise choices is an essential part of life, and it becomes even more critical when important financial decisions are involved.
To ensure that you make the best decision, it is important to do your research and gather all the information you need. It is vital to weigh all the pros and cons carefully.
Being prudent and taking the time to research all the options for debt relief in South Africa will enable you to make an informed decision that you will feel confident about.
This blog was brought to you by Ursula Gouws.
This blog is for information purposes only and does not constitute legal or financial advice.
If you enjoyed this blog, check out more Debt Talk with Ursula on the Ursula Gouws Consulting Blog, or download our Freebies to help you on your journey to a new financial future.
I am a Debt Strategist. Let me help you find the ideal legal solution for your unique debt situation.
I understand that dealing with financial distress can bring about feelings of guilt and shame, and even depression.
Rest assured – working together, we will get you back on track, so your finances and dignity are fully restored.
If you need help finding the ideal legal solution for your debt, feel free to reach out with the contact form on my Website.
