Drowning in debt? Grab this lifeline

There are 19million credit-active consumers in SA, of whom about eight million have impaired credit records. Around 14% of these have judgments recorded against them or are under administration. Since June 2007 this figure has steadily grown as the demand for credit increases.

Most consumers in SA cannot carry the burden of their debt in relation to their income…

… the demand for debt counselling and debt review rose this month. The promulgation of the National Credit Act has forced creditors to grant credit under stringent assessments, but many lenders continue to grant credit recklessly, while many consumers are not cutting back expenditure or ranking which expenses are essential and which are not.

Debt review offers consumers a lifeline. Consumers who are over-indebted and cannot meet their monthly debt obligations may approach a registered debt counsellor for assistance. Once a financial assessment has been concluded and the consumer is found to be over-indebted, his monthly instalments can be reduced so he pays only what he can afford.

Bonds, car repayments, credit cards and all credit facilities may be included under debt review. Debt review offers consumers the opportunity to restore their financial standing while keeping their assets (creditors may not remove consumers’ assets nor litigate while the debt review process is before the court).

Now is the time to act if you are feeling the strain of your debt obligations. Should you not meet your monthly contractual debt obligation, creditors will take legal action, then it is sadly too late for debt review.

It is not worth the risk of losing your property or being sequestrated when a lifeline such as debt review has been put in place to protect consumers and reduce their monthly debt obligations. Debt review is a benevolent process engineered to assist the man in the street – take advantage while you can.

The NCR (National Credit Regulator) have a website which has a search function to help consumers find a debt counsellor in their area. Unfortunately not all the names and details shown on that list are accurate.

The DCI have conducted monthly calls to debt counsellors countrywide and have gathered more accurate statistics.

Deborah Solomon (the founder of theDCI) said of the discrepancies: “As an example, our list for March 2012 shows that while there are 2141 debt counsellor listed on the national database (the NCRs site) , 305 had incorrect phone numbers, with 232 of those numbers out of order, 56 wrong numbers and 17 fax numbers.”

She said 444 debt counsellor on the national list “were no longer working, seven had been de-registered by the regulator, 32 had been excluded from the National Credit Regulator’s site, 21 Debt Counsellor had given their books away to other counsellors, and 384 were simply not practicing.

“We were unsure of the status of 633 debt counsellor who were simply unavailable, which left us with 759 verified, practicing debt counsellor as of April,” Solomon said.

This just goes to show that consumers would be better off looking in the Debtfree DIGI directory section or visiting sites like theDCI (www.thedci.co.za) for Debt Counsellor details.

So take that first step. Simply call us directly at 087 702 1738 or contact our supportive debt counsellors via our contact page. Dont have the time? Request a Free Call Back and one of our counsellors will contact you! Zero Debt is a certified Debt Counselling company.

Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.

Debt consolidation can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an asset that serves as collateral, most commonly a house. In this case, a mortgage is secured against the house. The collateralization of the loan allows a lower interest rate than without it, because by collateralizing, the asset owner agrees to allow the forced sale (foreclosure) of the asset to pay back the loan. The risk to the lender is reduced so the interest rate offered is lower.

Sometimes, debt consolidation companies can discount the amount of the loan. When the debtor is in danger of bankruptcy, the debt consolidation will buy the loan at a discount. A prudent debtor can shop around for consolidators who will pass along some of the savings. Consolidation can affect the ability of the debtor to discharge debts in bankruptcy, so the decision to consolidate must be weighed carefully.

Debt consolidation is often advisable in theory when someone is paying credit card debt. Credit cards can carry a much larger interest rate than even an unsecured loan from a bank. Debtors with property such as a home or car may get a lower rate through a secured loan using their property as collateral. Then the total interest and the total cash flow paid towards the debt is lower allowing the debt to be paid off sooner, incurring less interest.

So take that first step. Simply call us directly at 087 702 1738 or contact our supportive debt counsellors via our contact page. Dont have the time? Request a Free Call Back and one of our counsellors will contact you! Zero Debt is a certified Debt Counselling company.

Is it raining debt? Get out of debt fast

There is a saying that goes: A bank is a place where they lend you an umbrella in fine weather, and ask for it back again when it starts to rain.

With today’s high living costs and fluctuating economy many of us are standing in the rain, umbrella-less.

Over the past few years, the average South African’s debt levels have skyrocketed. When asking ourselves what the reason for this increase in debt levels is, we cannot deny the role that our fast-paced and impulsive lifestyles play. It has become habit to swipe a card when doing transactions and before we realise it, we lose track of the state of our bank accounts and become entrapped in the debt cycle.

There is ultimately only one sure way to get out of debt, and that is steadily and with a plan. There are some simple and fast steps to follow to get out of your debt in the shortest time possible.

Get out of debt fast and permanently – follow these steps:


    1. Track, track, track! Keep track of your bank account and your spending (via your computer and phone). As mentioned, one of the main reasons for getting entrapped by the debt cycle is because it is too easy to swipe our cards for everything and lose track of how many money we have left.


    1. Use cash for everything. This relates to the above-mentioned point: keeping track of your account and finances. Stop using your cards for transactions. When working with cash, you will also likely get a better idea of the money you spend and you will be more cautious in spending large amount of money.


    1. Make cuts to your spending. This is an obvious one but possibly the most important. Draw up a budget and stick to it.


    1. Pay as much as you can afford to each month – the bare minimum won’t do if you need to get out of debt fast.


    1. Automate your payments. This way you cut out the risk of forgetting payments and incurring penalty fees and higher interest rates.


    1. Pay off debts with the highest interest rates first. You will save in annual fees this way and pay off your debts faster.


    1. Get rid of your retail credit cards. These cards have very high interest rates compared to those from major lenders.


    1. Use nonrecurring sources of income (also known as “unexpected money” or money that does not come from you primary income source) to pay off your debt.


    1. Freelance to earn extra money.


    1. Get financial counselling. Let the experts guide you through the debt relief process.


If you follow these guidelines you will be able to get out of debt fast. Aim to become more aware of your finances from now on to avoid making more debt. Remember, it will always rain, but make sure that you have your own umbrella!

Debt Counselling Scams: how to choose a reliable debt advisor

Too many South Africans are buckling under the weight of debt. On a daily basis, they are faced with high levels of stress and feelings of despair, because they cannot seem to escape the debt cycle despite their best efforts. Unfortunately, where there is human vulnerability, there is also exploitation. There is no shortage of debt relief agencies that are exploiting this vulnerability and despair. Debt and credit counselling scams are a harsh reality. If you are living with debt, the only way to protect yourself in an already vulnerable state is to be very cautious and well-informed.

On a more positive note, due to the rapid increase in scams over the past few years, there is generally a greater public awareness of this occurrence. If you do your homework, it is relatively simple to identify dishonest companies and steer clear of them.

Here are some tips to identify honest, reputable agencies like Zero Debt and avoid Debt Counselling Scams:

  • Use independent review forums. It is valuable to be present on forums where you can learn from other indebted individuals, who share their experiences with a specific company/agency.
  • If the company you are considering does not appear in the review forum, you can post a question and get responses from fellow Internet users.
  • Take being rushed by a company/agency as a warning sign. Never make a hasty decision: choosing a debt relief/counselling agency is not something to be rushed into. Do your homework first.
  • Have a careful look at what payment will consist of. Even if it is an honest company, how much will you truly be saving through them? At Zero Debt, our payment is only a percentage of the amount we save a client.
  • Ensure that there will be good after service. A professional debt relief company should noet abandon you after you become debt free. They should educate and equip you to be financially self-sufficient in the future: teaching you the necessary skills to manage your finances after becoming debt free.

Zero Debt is registered with the National Credit Regulator (NCR). Clients or prospective clients are welcome to contact the NCR for confirmation hereof. We can also provide you with our debt counsellors’ certificate on request. We handle all applications with great integrity and confidentiality to ensure peace of mind for our clients.

Become debt-free by avoiding the causes

Many South Africans buckling under the heavy weight of debt describe a sudden, ‘overnight’ realisation of the size of their financial dilemma. The gradual build up to a financial meltdown seems to go unnoticed until one day, often in a person’s mid- to late twenties, when he/she makes an assessment of the future and sees only crippling debt.

Whether you are already in the process of professional debt relief or considering getting professional assistance, it is valuable to go back to the root of your financial dilemma, in order to avoid the mistakes that led to your debt in the first place.

To become and STAY debt-free, the following mistakes should be avoided at all costs:

  • Not working with a budget or spending plan. It is vital to set clear spending goals: without them, you will have minimal chances of staying out of debt. You cannot afford to lose your extra income towards high-interest monthly credit payments. A clear and fixed budget will help you live within your means and make it possible to build up an emergency fund.


  • Making irresponsible purchases will make it almost impossible to become debt-free and destroy any progress you’ve started to make in your debt repayments. Self-discipline is the key secret to becoming and staying debt-free. Aim to weigh up the consequences of every purchase and avoid those that will steer you away from your ultimate goal: living a debt-free life.
  • Purchasing a new car every few years. Buying a new car when you are only a few months away from paying off your current car loan is not a financially sound decision, even if you have a steady income – in fact, it will defeat your best efforts at becoming debt-free.

At ZeroDebt, we understand the stresses of debt and can help you free yourself from the debt cycle. If you see no way out of debt and cannot manage your financial obligations, ZeroDebt offers professional and expert debt relief services. Contact us at 087 702 1738. ZeroDebt is registered with the National Credit Regulator.

Emergency fund: how to start one?

Why is an emergency fund so crucial to your financial health?

  • It will decrease your debt. In times of emergency, people with no emergency fund usually turn to the faithful credit card: this means your debt repayment will most likely be the first thing to suffer, digging you even deeper into debt.
  • It will smooth out your budget.Without an emergency fund, you will have to re-adjust your budget at the first sign of an emergency expense. With an emergency fund in place, budgeting will be much simpler and less stressful.
  • You can prevent late fees. If you are living from month to month, it is inevitable that there will be times when you cannot pay a bill on time, or the only option is to overdraw your bank account. An emergency fund can help prevent these financial lows.
  • You can finally get ahead. It is very stressful to play catch-up every month. If you have an emergency fund your financial stress will decrease, because you can pay bills in advance.

Most people know that an emergency fund is essential and have good intentions, but lack the knowledge to build up one. These are some solid strategies for putting deed to word.

Selected strategies for building up an emergency fund

(Read the full article at https://bit.ly/1pmrpdB).

  • Start small.  Every little bit helps – just start.
  • Automatic deduction. Setting up an online savings account works: this way, your contribution is automatically deducted each month.
  • Treat your fund contribution as a bill.  If you add your emergency fund contribution to your list of bills, it becomes a non-negotiable and you won’t spend it on unnecessary luxuries.
  • Reduce your spending.  Have a look at your budget and see where you can save money, then use that money towards your emergency fund.
  • If you pay off debts, don’t spend that money.  As soon as you finish a payment, e.g. a car payment, be careful of spending the money you used to contribute. Rather, take the amount you were paying to that debt and use it for your emergency fund.
  • Quit smoking or drinking.  No need to elaborate: you will save significantly if you kick the habit.
  • Limit your access.  At one time or another, you will be tempted to spend your savings. If you know your self-discipline won’t always be what it should be, a good solution is to put your savings an account that is hard to access, e.g. having it roll into a CD or Treasury bond.
  • Save tax refunds or bonuses.
  • Save your change.  You will be surprised to see how those coins add up.
  • Skip dessert.  Save the money you would have spent in an envelope and see how it adds up. This one has the added benefit of losing weight!
  • Stay in.  Cook and entertain yourself at home and put the savings into your emergency fund.
  • Freelance.  Use the extra income towards your emergency fund.

Money mistakes during different life stages

NCR help KZN government host workshop on debt counselling

The KwaZulu-Natal government, in partnership with the KwaZulu-Natal Financial Literacy Association (KZNFLA),

South Africa’s number of over-indebted consumers is worryingly high. People are guilty of general financial mistakes, for example not applying self-discipline and splurging on unnecessary items, not saving, not having a spending plan, etc. Due to the fact that each life stage presents us with different needs, there are also very specific mistakes, linked to different ages.

To stay debt free and financially secure, steer clear of the following financial blunders.

Read the full article at https://yhoo.it/1t3uj6n.

In your 20s: Living above your means. Not saving for retirement


  • Very few people earn enough money in their 20’s to afford luxuries like travelling, the latest car, fashion, etc. Those that do over indulge end up with large sums of debt in the long run. A budget is non-negotiable.
  • Don’t fall for the illusion that retirement is far away. It is crucial to start saving as early as possible to ensure a comfortable retirement.

In your 30s: Combining finances. Delaying insurance

  • Many individuals in partnerships tend to combine all of their income with their partner or spouse. The possibility is always there that the relationship might end, leaving them off less financially stable than had they kept some of their finances separate.
  • A safer idea is to have a separate account for your income and share expenses equally out of a joint account. Also, keep any investments in your own name.
  • Insurance is an essential expense. The younger you sign up for insurance policies, the lower your rate is.

In Your 40s: Funding further studies over retirement accounts. Not saving enough

  • The more you can save and the sooner you save it, the better. It is easier to contribute a small amount of money monthly than a large sum at once. It is not pleasant to realise you’ve turned 60 and have no retirement savings.
  • If you have children, avoid helping them pay for their further studies at the expense of your retirement funding. Do what you can do to save for both, but place your retirement needs first.

In Your 50s: Co-signing on a loan. Getting too defensive with savings

  • Nowadays, merely preserving capital is not a sustainable financial solution in this age group. Ensure that your money grows to avoid your bank account drying up.
  • If you have children, be cautious of co-signing to help them with big purchases

In Your 60s and Beyond: Underestimating medical expenses. Overlooking your income

  • Beware of simply living off your retirement funds. It is crucial to keep on proactively building and maximising your retirement funds. Use them to continue earning income, e.g. via stable dividend stocks, CDs or bonds that offer regular payments.
  • Do not underestimate health expenses: rather build in future medical needs into your retirement savings plan, and consider purchasing long-term care insurance.

So take that first step. Simply call us directly at 087 702 1738 or contact our supportive debt counsellors via our contact page. Dont have the time? Request a Free Call Back and one of our counsellors will contact you! Zero Debt is a certified Debt Counselling company.