Debt Management


Expectations VS. Reality – When life happens!

Contrary to the stigma that consumers are indebted as a result of reckless spending or borrowing, most consumers who approach DebtBusters for assistance do so as a result of unforeseen circumstances.

Many young people set huge expectations for themselves even before they’ve entered the ‘real world’. There is often a set idea of what success looks like that has been deeply entrenched during the teenage years, and the goal is to achieve this success as quickly as possible. They hope to land their dream job, fulfil personal and financial goals such as owning a car and a home, and providing for a family one day.

However, more often than not, life’s uncertainties and curveballs are thrown at us and things do not always go according to plan. This was the case for 28-year-old Thandeka* (name changed to protect her identity), who felt the financial pressure after experiencing a break up with her partner, as well as starting a new job in a more expensive area.

After Thandeka’s* break up and accepting a new career opportunity, she found herself in an arduous financial situation. Her rent had increased and her petrol consumption was higher. It became clear that it was not possible to adapt to her new lifestyle with a single cash injection after having created a life based on a dual income.

Thandeka* approached DebtBusters to apply for debt counselling, and the initial assessment showed that her changes in circumstance, as well as her increased expenses,  led to her being over-indebted. This outcome made her a fitting candidate for the process.

Thandeka* says that the debt counselling process has made life much easier for her, as it has freed up cash flow allowing her to afford her monthly living expenses, as well as ensuring that her debt obligations are met and that she is on the right track to becoming debt-free.

As part of an incentive campaign launched earlier this year, DebtBusters recently awarded Thandeka*, who was randomly drawn from a pool of qualifying clients, R50 000 off her total outstanding debt.

The R50 000 will be used to settle both Thandeka’s* retail accounts, and the remaining balance will go towards her vehicle loan. Having Thandeka’s* vehicle loan under the debt counselling agreement also means that her vehicle is legally protected throughout the process, and she will be able to get from A to B without worrying about her vehicle being repossessed.

With the injection of the R50 000 towards her debt, Thandeka* will shorten her debt counselling journey significantly, her vehicle will be paid up, and she will be able to start financially afresh and focus on her goals and aspirations.

Thandeka* aims to save as much money as she can towards advancing her career and securing her first home with a substantial deposit. She also mentioned that she doesn’t see herself taking out any further credit in the future unless it is to purchase a house.

Over-indebtedness can creep up on any consumer, and when an unexpected life event arises, our financial obligations often remain the same or can even increase. It is important for consumers to be aware that these situations can happen to anyone, and that seeking the right professional help, such as debt counselling, can be the answer if you’re committed to the end result – a Financially Free Future.




Can I lose my car if I am under debt counselling?

Being in a position where you are struggling with debt is already stressful. Now add the fear of losing an asset like your vehicle due to non-payment, and it is a recipe for financial disaster.

But what if you have already enlisted the help of a debt solution such as debt counselling – do you still risk losing your vehicle?

You can rest assured the answer is no.

One of the many perks of undergoing the debt counselling process is that your assets, such as your home and your car, are protected.

Your debt counsellor will negotiate with your creditors on your behalf to implement a manageable repayment plan where the interest rates on your various credit agreements have been lowered, which means you pay less.

This plan also allows you to systematically pay off your debts – including your car instalments – until you are debt-free.

This also means that your debt counsellor now acts as the go-between for you and your creditors, who are no longer allowed to harass you with incessant phone calls and payment notifications.

But there is a catch. If you have been served with a Section 129 notice or a Letter of Demand and you do not apply for debt counselling within 10 days after receiving that notice, you may still be at risk of having your car repossessed.

You are also left exposed if you have failed to hold up your side of the debt counselling process by missing payments.

However, this can all be avoided.

Ensure that you sign up and enlist the assistance of a trusted debt counselling provider as soon as you realise that you’re unable to manage your debt effectively. Following that, it is equally important that you stick to the debt counselling agreement and ensure that payments are made on time.

We are dedicated to helping you rehabilitate your debt, while holding on to all your assets, in the safest most manageable way possible.

Also read: Understanding a section 129 notice and what to do when you receive one.


Overcoming the psychological impact of being over-indebted

Being over-indebted has a negative impact on your personal finances. It reduces your credit score, absorbs your disposable income, and prevents you from building your savings.

Added to this, it also has an impact on your emotional well-being. Being over-indebted can contribute to a string of psychological issues, such as anxiety, loneliness, and depression.

It is important to look at how these issues manifest as a result of debt, as well as what you can do to get back to your usual, healthy self.

Don’t be paralyzed by anxiety
Once the reality of how over-indebted you are sets in, you may feel yourself falling into a panic. It can be overwhelming to watch your debit orders bounce back, knowing that yet another creditor will come knocking on your door.

But don’t let this anxiety paralyze you. It is important to reach out for help before your creditors start taking legal action against you. At DebtBusters, our financial assessors are ready to hear your story and offer you the best solution based on your unique financial needs.

Don’t carry the burden alone
If you’re struggling with your debt, the last thing you want to do is advertise this to the world. Perhaps you don’t want your family to worry about finances, or maybe you’re embarrassed to tell your friends. It can therefore become an incredibly lonely journey.

But you don’t have to carry this burden alone. Your family and friends are there to support you during difficult times and being over-indebted is nothing to be ashamed of – thousands of South Africans struggle with the same challenge every day.

Speak up, talk to those around you, and ask them for advice. But don’t borrow money from them. The last thing you need is more debt. Rather opt for debt counselling, which will reduce your monthly debt payments and ensure your creditors will stop calling you.

Don’t take depression lightly
When you’re struggling with your debt, you may feel more hopeless than you’ve ever felt before. It may feel as though a weight has landed on your shoulders, giving you a heavy heart and sapping the energy from you.

Depression must not be taken lightly. If ignored, it can completely consume you and eventually prevent you from getting out of bed. If you realise you may be depressed, immediately reach out to your loved ones or a professional for help.

At DebtBusters we can further assist you by showing you that there is a way to manage your debt. Being over-indebted is not the end of the road for you. We can help you find a way forward so that you can leave the weight you’re carrying in the past where it belongs.

Get in touch with one of our financial advisers today for a free debt assessment.


The Emotional Stages of Debt – Where Are You?

Whether they are aware of it or not, some consumers face various emotional stages in the process of becoming over-indebted. While consumers may not experience all of these stages, which don’t always follow in chronological order, it is important to be aware of these stages in order to take action and avoid financial devastation further down the line.

There are a number of scenarios that can lead to financial trouble. This can range from unexpected expenses that are not affordable without the aid of a loan to assist, to relying on credit to cover expenses and fuel a certain lifestyle. Some consumers even face financial difficulty when they do not have adequate insurance cover in place. These events are not uncommon and can often be the prelude to becoming over-indebted if the necessary steps are not taken.

The danger of this is that the damage creeps up on you and your financial health, and before you know it, the negative emotional stages of debt start to filter in.

Stage 1: Denial

Consumers who are in denial about their debt often refuse to recognise that they need financial help. This is where consumers most struggle to reconcile their debt habits with the idea that they may be in danger of becoming over-indebted.

Consumers who are in denial typically make excuses for their inability to meet their debt obligations and bury their head in the sand. They are also inclined to write off incessant creditor calls and payment notices, and may refer to being in a “temporary tight financial spot”.

Stage 2: Stress, Anger, and Regret

Financial stress is one of the biggest contributors to certain health conditions. Experts report that those with a high debt-to-income ratio have the highest occurrences of stress-related conditions such as insomnia, anxiety, and hypertension.

In this stage consumers start to come to terms with their financial situation as the cracks start to show. This may mean that due to their over-indebtedness, they’re frequently seeking loans to make ends meet or field debt collectors.

The anger and regret then sets in when the consumer realises that they’re being denied loans as their credit profiles start reflecting their poor financial health.

The strain of meeting debt obligations coupled with affording their lifestyle is enough to send them into a downward spiral, which marks the next stage.

Stage 3: Depression

This is possibly the most significant and dangerous stage of the debt acceptance cycle. Here consumers are confronted with the reality of their financial situation and the choices that have led them to this stage.

It is indicative of hopelessness and desperation. Experts say that depression fuelled by financial anxiety is both common and crippling as consumers are unsure of who to reach out to for help. This is because of a lack of financial education, as well as a lack of awareness of the debt management solutions available to consumers.

Often at this stage the consumer spends the majority of their salary towards debt, which is demotivating, and makes it hard for the consumer to keep up with monthly living expenses.

Stage 4: Acceptance

Coming to terms with being “over-indebted” is a huge step. Often people spend the first three stages resenting this term and rejecting the help they need.

But choosing to accept your financial status can hugely impact your rehabilitation journey. This is because the most significant part of acceptance lies in a consumer’s willingness to be helped.

DebtBusters regards this as the most valuable stage, and aims to get consumers to this stage as quickly as possible so that their journey to debt freedom can begin. When the consumer is eager to work with us, we can provide them with a tailored debt solution that suits their unique financial needs.

Resolution: Freedom

This is the stage where a consumer has successfully completed a debt solution. The consumer feels a sense of relief and happiness as they have transitioned to being completely in control of their finances, and in a lot of cases, debt free.

For many consumers this is the goal, but it can seem unattainable without the proper help.

If you find yourself struggling through any of the five stages of debt acceptance, allow us to help you.

For a free debt assessment, help with rearranging your debts, and saving you money in the process, contact us  today.


How long before debt is written off in South Africa?

If you have been struggling to pay off a certain debt, the question of how long before the debt could be written off may have crossed your mind. According to experts, the answer lies in whether this is considered prescribed debt or not. There are also different time specifications for different loan types.

Prescribed debt refers to the debt that has not been recognised by the creditor or been paid towards for more than 36 months. This is considered old debt by creditors and may then be written off.

In the past, creditors would often ignore the debt, allow it to gain interest, and then pursue collection after the debt had accrued to substantially more than the original amount.

Consumers who were often not as financially clued up on their rights when it comes to this process, had to fork out exorbitant amounts. This is because it was fully up to them to argue prescription as a defence.

But since the 2015 amendments made to the National Credit Act (NCA), which focusses on educating consumers about their rights, it has been harder for creditors and collectors to regain this debt.

However, collectors will still try their luck and insist that the consumer is liable to pay. The most common tactic is to get the consumer to acknowledge the debt through incessant communication.
This means that should you engage with them and therefore recognise the debt, you may be liable for it and they have grounds to pursue collection.

Another consideration is the time specifications afforded to certain loan types. According to experts in South Africa, there is a distinction made between Group A (personal loans, vehicle loans, credit cards, and store accounts) and Group B (home loans, court-ordered debt, and debt owed to the South African Revenue Services).

This distinction details that Group A may be considered prescribed if the debt has not been recognised for three or more years. Group B needs to have not been recognised or paid towards for thirty years.

It is important to note that non-recognition of debt means having made no payments or never receiving any collection communication or never been issued with any notice of legal action from the creditor.

At DebtBusters, we want to iterate that this does not mean that you should ignore your debt. Often doing this could lead to repossession of assets, or further legal action that could see you having to fork out far more than the original debt amount.

Instead, if you are struggling with keeping up with debt repayments, we encourage you to contact us for a free debt assessment and the necessary debt assistance.

Not only will we protect you from legal action and repossession, but we will be able to identify whether your debt can be considered prescribed. If so, we will make it our duty to ensure that the correct course of action is followed.


The dangers of informal lending

In recent years the number of informal lending schemes in South Africa has grown significantly as people continue to look for new ways to access more money. But is this a reliable and safe way to take out a loan?

The term ‘informal lending’ is typically used to describe lending schemes or practices that are not regulated by a formal, registered and accredited financial institution such as a bank. These schemes often involve unsecured loans and have grown in popularity because they evade common affordability checks and processes, meaning they cater to the over-indebted.

For many the attraction lies in knowing they will probably be approved for a loan despite being over-indebted.

Examples of these schemes include but are not limited to stokvels, pyramid schemes, and various investment clubs.

While some of these schemes are above board and safe there are others that are financially dangerous and here’s why:

1. You may not be able to make payments: If you are already in financial trouble and struggling to meet current debt obligations, the chances that you will be able to comfortably afford additional payments are slim. Not only will you be adding to your financial stress, but you’ll run the risk of falling behind on payments.

2. You could face expensive interest rates: Often these unsecured informal lending schemes have exorbitant interest rates that make repayments expensive. This is because the lender needs to recover the cost of the loan in a shorter period.

3. It may not be the solution you’re looking for: Struggling to meet debt repayments and feeling like you are drowning can be stressful to the point where you may seek other options such as lending informally. While this may fill a gap, it won’t enable you to better manage your debt.

Instead, you should be looking into smarter debt solutions such as debt counselling that aim to rehabilitate your finances. At DebtBusters, we specialise in helping you improve your financial situation so you’re able to enjoy a more secure financial future, with the long term goal of debt freedom and building your wealth firmly in place.

4. You may not be covered under debt counselling: Another pitfall of getting involved in informal lending is that if the lender or creditor is not accredited or registered with the National Credit Regulator, they are not protected under the National Credit Act and therefore cannot be included in the debt counselling process. This means that even if you do enlist in debt counselling, any informal lending credit agreements cannot be negotiated.

5. Unsavoury debt collection methods: Signing up for informal lending schemes opens you up to unregulated and potentially dangerous practice. This means that should you be unable to pay, you could find yourself in an unsavoury situation where the lender could threaten your safety and even your life upon non-payment.

Resorting to stop-gap measures to financially survive from month to month could be indicative of a deeper debt problem.

If you find yourself in this boat, contact DebtBusters today for a free debt assessment.


Do you have too much debt?

You notice most of your salary is going towards your debt repayments each month, you cannot afford to put money towards a savings account, you purchase your groceries with your credit card, and your credit applications are being rejected. These are all signs you’re carrying too much debt.

But how much is too much?

A method that is used to calculate the load of debt you have is the debt-to-income (DTI) ratio. This method is often used by banks when assessing your affordability when you apply for a loan.

DTI refers to the portion of your income that goes towards paying your debt. A low DTI ratio shows a good balance between debt and income.

To calculate this, add all of your various monthly debt repayment instalments together and divide them by your gross income – that is your income before any deductions such as taxes, insurance, and medical aid. Your debt repayments include your personal loans, mortgages, car finance, credit cards and student loans.

If the bank finds that more than 43% of your income is spent on covering your debt, you are not likely to get the loan. However, if it’s lower than 36%, your loan application will be approved, given that you meet other requirements.

A lower DTI demonstrates that you will be able to meet your monthly repayments.

Ways to reduce your debt

  • Sift bad debt from good debt: Student loans and mortgages can be considered good debt because they usually yield some form of return. Credit cards and store cards are not investments and they usually carry higher interest rates than other debts. Prioritise paying off your bad debt as soon as you can.
  • Get an extra income: Do not overextend yourself, but if you have extra time and an opportunity to do more work, take advantage of it. A second income will help you settle your debt faster.
  • Budget: Ensure you create an effective spending plan. Write down all your expenses and cut down on the unnecessary ones. List them according to their importance. This will help you see if there is extra cash you can stash away.
  • Save: Get into the habit of saving. Even R100 a month will go a long way. Saving will ensure you never have to borrow when you are short of cash – plus, you can use this to pay off your debt if necessary.
  • Look out for debt settlement discounts: DebtBusters’s debt settlement department can organise you a settlement discount with your creditors when you put a lump sum towards paying off your debt.
  • Apply for debt counselling: If you find that you are struggling to meet monthly repayments, consult a debt counsellor who will help you consolidate your debt without taking out an additional loan.

DebtBusters can help you restructure your debt repayments, making it easier for you to repay your loans. Contact our friendly consultants on 086 999 0606 or email to


How long does the debt counselling process take?

You may be familiar with the term “debt counselling”, but perhaps you have questions around the process and specifically how long it takes to complete.

While the general time frame is 60 months or between 3 to 5 years, it is dependent on how much debt you have and how much you can afford to repay per month. This is because each case is assessed individually and based on what you can afford.

The debt counsellor will then negotiate with your credit providers to lengthen the repayment timeframe, and to lower the interest rates and fees on your debt. Lengthening the payment terms will allow you a longer time in which to pay off your debt. This will result in lower monthly instalments. The lowering of interest rates and fees on your debt will also save you a considerable amount of money in the long run.

The main goal of debt counselling is to lessen your monthly debt instalments, making it more affordable for you to pay it every month while still allowing you to afford your living expenses.

Once you are under debt counselling, you will make one combined reduced monthly payment as opposed to paying each credit provider individually. Your debt counsellor will then get a court order or a consent order on your behalf, which will provide you with legal protection from your credit providers. This means they will no longer be authorised to call and harass you about any outstanding debt.

Another factor in the process is your commitment. What this means is that if you are not committed and diligent about making your debt repayments, you will fall further behind and essentially take far longer to reach your financial goals. Undergoing debt counselling requires you to be disciplined and cooperative in ensuring a smooth process.

But it is a small price to pay in exchange for protection from losing your assets, as well as the clearance certificate you will receive at the end of the process to certify your debt freedom.

In addition, should your financial position change while under debt counselling and you are able to pay larger amounts or a lump-sum amount, it can be arranged that you conclude the process even sooner.

Chances are you didn’t land yourself in hot water with your finances overnight, so it’s only fair that you allow the rehabilitation process to also run its course.


Debt counselling versus debt consolidation – let’s explain

If you’re struggling with managing your debt, you may be considering debt counselling or a debt consolidation loan as possible solutions to ease the financial strain. It is important to understand the difference between these two debt solutions, as although both are aimed at making managing your debt easier, they are two differently designed processes.

The five need-to-know differences are:

  1. The process:

Debt counselling allows you to consolidate your debt without having to take out an additional loan. The debt counsellor will negotiate lower interest rates and fees with credit providers on your behalf, and arrange a restructured, combined monthly repayment amount.

Debt consolidation requires you to combine all your debts by taking out a bigger loan to cover your smaller loans. The idea is to make it easier for you to manage your debt by making one repayment towards the consolidation loan each month, rather than worrying about paying various credit providers each month.

  1. Taking out credit:

Debt counselling prevents you from taking out any further credit while you are under the debt counselling process. This is for the consumers own good as the debt counsellor will restructure your repayment plan so that you have enough money to afford your living expenses each month, and taking out more credit will only hinder your financial situation further.

Debt consolidation allows you to apply for further credit. While this may seem ideal, many people are not disciplined enough to steer clear of wracking up more debt and managing it properly. This could result in a consumer becoming over indebted and needing to go under debt counselling.

  1. Protection from creditors:

Debt counselling gives you full legal protection from creditors, as outlined in section 86 of the National Credit Act. This means that all communication will go through your designated debt counsellor.

A debt consolidation loan on the other hand means that creditors are still free to contact you.

  1. Your assets:

The debt counselling process is designed to protect you from the repossession of your assets.

A debt consolidation loan will not protect your assets from repossession as part of the agreement.

  1. Qualifying criteria:

The debt counselling solution is designed for those who are gravely in arrears with their debt repayments and struggling to manage it.

For debt consolidation, the minimum criteria is a clear credit record and no existing arrears on debt repayments. Further, for debt consolidation to work, consumers must be sure that they are able to afford the monthly instalment every month, which is typically not possible for debt counselling candidates.

If you’re in over your head when it comes to managing your debt, you may need to consider contacting a trusted debt management company. At Debtbusters we will find the best debt solution for you and walk you through the process – one step at a time.


The Clearance Certificate: The ultimate goal in your Debt Counselling journey

Debt counselling is a journey which requires dedication and commitment for up to five years of your life, so we know receiving a clearance certificate at the end of the journey is a momentous occasion for both our clients and our staff who walk side by side them during this time.

DebtBusters has already issued close to one thousand clearance certificates in the first quarter of this year!

We feel great pride towards our clients for sticking to the debt counselling path and completing the process because we know the sacrifice and dedication involved. Receiving your clearance certificate not only marks the official end of your debt counselling journey, it is also a new financial start for you and your family!

What to expect:
Your clearance certificate is a letter that will be issued by DebtBusters, stating that you have settled all of your debt as per your debt restructure plan. The National Credit Act states that you are eligible to receive your clearance certificate when all of your unsecured debt is paid up, your bond/mortgage or long-term agreement payments are up to date and all of your debt counselling fees are paid up.

DebtBusters will also issue the clearance certificate to all of your credit providers and the credit bureaus. Once the credit bureaus have received your clearance certificate, they will be able to remove the debt counselling flag off your profile. They will also remove your default listings and judgements. Only your payment history will remain.

Tracking your journey
We know that our clients wait in anticipation for the day they receive their clearance certificate, so we have made it easy to track this process through our client portal Smartcents. By logging on to Smartcents, you track your individual debt counselling progress and can see how close you are to receiving your clearance certificate. You can also use this portal to log a query, view your payments and account balances.

And after?
DebtBusters is here to support you through and beyond your journey to debt freedom. We know that starting the post debt counselling chapter can be daunting, and that is why we are here to assist you beyond your debt counselling journey. We offer further financial advice and guidance to find the best financial products which will ensure you are in the best position to flourish financially.