15 Oct How to identify if you are in over your head with debt

Many South African consumers are faced with the constantly rising cost of living, which leads to an increase in monthly financial pressures. Before you know it, credit card and loan repayments are keeping you up at night and you find yourself over indebted and unable to survive from month to month, while still fulfilling your debt repayment obligations. While it is never intended, debt sneaks up and over time, can affect many areas of your life.

While there is no definite formula that leads to being over indebted, the signs usually present themselves early on. At Less Debt, our well versed consultants work with a range of consumers in providing comprehensive debt management services, knowing that professional assistance can often make a notable impact on an individual’s financial outlook. Our Less Debt team oversees thousands of monthly enquiries, where consumers (even those falling in the higher income bracket) are overwhelmed and unable to resolve their financial setbacks by themselves.

Out of more than 25 million South African’s making use of credit, 13 million have bad credit scores and will have trouble taking out another loan. These numbers are significant and do not even take into account the many other individuals weighed down by insurmountable debts every day, without any silver lining in sight. Our Less Debt team make is our mission to provide reliable and result driven services, which include dedicated Debt Review and Debt Counselling.

There are a few telltale signs that will help you understand if you are over indebted. Once you are able to accept what you are facing, it will be easy for our Less Debt team to address your concerns and provide effective debt management solutions that are aligned with your financial needs.

Your debts are keeping you up at night – When overcome by debt, you may find yourself lying awake at night worrying about upcoming payments, potential threats such as asset repossession that result from late payments, or even how you are going to put food on the table. These negative feelings will break down your mental health and can affect your loved ones too.

Once your debit orders come off, you cannot afford to make ends meet – There needs to be stability in your finances, which is something that many consumers struggle with. Your monthly budget should balance monthly living expenses and all monthly instalments, however many over indebted consumers cannot afford rent or groceries once their instalments come off.

Counting on payday loans for quick relief – Taking out a short term loan to make it through a difficult month initiates a snowball effect, where the immediate relief is outweighed by the long term effects. Though an extra R1000 makes a difference this month, next month you will be more than R1000 short, plus any interest on that loan, adding strain to your already tight budget. As you continue to rely on loans to make it through every month, your monthly finances will quickly become unmanageable.

Being overwhelmed by debt obligations at month end – If the end of the month arrives and you feel suffocated by your financial burdens and unmanageable bills and instalments, you definitely need to consider seeking out help. Carrying on this way will only worsen your outlook on financial relief, as well as driving you to incur more debts.

For reliable debt management services that are geared to your unique financial requirements, check in with Less Debt today. We are here to make your finances easier to manage!

Denial about the severity of your debts, or the “quick fix” mind set – Sometimes it is easier to tell yourself that your debt is only temporary, or believe that by next month you will have it under control. When denial sets in and you start making excuses, they will eventually catch up with you.

Struggling to pay back monthly payments on smaller accounts – When faced with too much debt, it is likely that bigger debts, such as car payments and students loans, will be prioritized. By doing so, smaller debts can sometimes take a backseat on a tight budget, which could lead to late or missed payments that are a sure sign of being over indebted.