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What is Debt?

Debt is the money that you borrow with the agreement to pay it back, often with additional interest.

 

For many South Africans, debt helps them to achieve important goals, such as buying a house, paying for their children's education, or even starting a business. When managed properly, debt is a valuable tool that can create many opportunities.

South Africa is facing a growing debt crisis, with increasing credit pressure and many consumers struggling to manage their repayments.

The Stigma of Debt

Debt is a topic that many South Africans avoid. Often, people carry the burden of financial stress in silence, while the stigma surrounding debt prevents them from seeking the help they need.

What happens when debt gets out of control?​

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This page will cover the following topics:

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  1. What is secured and unsecured debt?

  2. Why do people incur debt?

  3. The dangers of excessive debt

  4. How debt review can help you

Secured and Unsecured Debt

Understanding the type of debt you have is essential to manage your finances.​

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Secured Debt

Secured debt is linked to a specific asset, such as your home or car. This means that your asset serves as collateral.

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Examples:

  • Home loan

  • Vehicle financing

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Benefits:

  • Lower interest rates 

  • Access to larger loan amounts

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Disadvantages:

  • You could lose the asset if you fail to make payments..​​

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Unsecured Debt

This type of debt does not require collateral and includes credit such as credit cards, personal loans, and store accounts.

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Benefit:

  • Easier access to funds

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Disadvantage:

  • High interest rates

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Why do people have debt?

Debt is often used to achieve specific goals or to handle unexpected expenses.

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Common reasons for debt:

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  • Property and vehicles: To buy a home or secure reliable transport.

  • Education: To pay for studies for a better future.

  • Medical expenses: To cover unforeseen health costs.

  • Emergencies: To handle unexpected financial crises.

 

While these reasons are valid, it’s important to manage debt responsibly.

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Skuldhulp is Here to Help You

 

Skuldhulp is ready to assist you in managing your debt and getting your finances back on track.

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Excessive Debt and Its Impact

Excessive debt occurs when your debt levels exceed your ability to repay them.

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Common reasons for excessive debt:

 

  1. Loss of income

  2. Loans

  3. High interest rates

 

 

It not only affects your finances but can also negatively impact your mental health, relationships, and overall well-being.

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Debt affects your entire life

Debt affects your entire life. It contributes to stress, tension in relationships, and even depression. If you are constantly worried about how to make the next payment, you might have little emotional energy left for your children as a parent. This happens to all of us.

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Saying "no" permanently can make you feel like you’re letting them down, even though you know you're doing your best. You want to give them everything their hearts desire, but how on earth can you do that when you can barely pay your bills?

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Until your financial situation improves, there are ways to lessen the impact of "no":

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  • Be Honest: Children understand more than we think. Explain your financial situation in a way that's appropriate for their age.

  • Create New Memories: Children don’t always remember the toys they didn’t get, but they remember the time spent with you.

  • The Value of Money: Use this situation as an opportunity to teach your children basic financial skills, such as saving and the value of money.

Skuldhulp is proud to assist families with debt review.

 

We understand how challenging life is these days, and we want to help you secure your family’s future.

 

It’s not too late to make a change. Every step you take to reduce your debt brings you closer to a life where you no longer have to say "no."

 

With the right support and solutions, you can get your family back on track.

If you're struggling to manage your debt, debt review is an excellent solution. It helps you to:

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  • Reduce your monthly payments.

  • Avoid legal action.

  • Protect your assets.

Debt Review is an effective debt relief process in South Africa, specifically designed to assist consumers with excessive debt to ease their financial burdens and ultimately become debt-free. This process, introduced in 2007 under the National Credit Act (NCA), provides an alternative to being blacklisted—something that often has a lasting impact on a person's financial future.

 

For many South Africans struggling with unmanageable debt and difficulty covering basic expenses, debt review offers a solution. It enables them to repay their debt in a responsible and affordable way, without the risk of legal action or further financial strain.

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If you earn an income but cannot meet your minimum credit obligations each month, help is available through a process called debt review.​​

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What are the benefits of debt review? â€‹

 

Debt review is specifically designed to protect South Africans when they can no longer meet their debt obligations.

 

Here’s how debt review can help you:

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1. Your assets are protected

One of the biggest benefits of debt review is that your assets, such as your home and car, are protected from repossession. Your debt counsellor will negotiate on your behalf with creditors to create an affordable repayment plan. As long as you stick to this plan, you can retain your assets and maintain financial stability.

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2. Creditors cannot harass you

From the moment you enter debt review, creditors can no longer contact you directly. All communication between you and your creditors is handled by your debt counsellor. This relieves the pressure and stress of constant calls and demands from debt collectors.

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3. One reduced, affordable monthly payment

Debt review allows you to consolidate your debts into one reduced monthly repayment. Your debt counsellor negotiates with your creditors to lower interest rates and payment amounts, making it easier for you to meet your financial obligations while still covering your living expenses.

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4. Protection against legal action

While under debt review, your creditors are prohibited from taking legal action against you. This allows you to pay off your debt without the fear of court summons or asset repossession.

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When you struggle to make your debt repayments at the end of the month or if your income is no longer enough to cover your basic living expenses, it may be a sign that you have too much debt.

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Many South Africans find themselves in this situation due to reliance on credit.

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