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MONEY CLINIC | I don’t have a fixed income and I can’t afford to pay off my debt. What happens now?

The more you are able to pay on your outstanding debt, the sooner you will become debt free.

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A Fin24 reader who got a credit card and overdraft facility a few years ago while earning a good income is now unable to pay to settle his debt due to unemployment. He wants to know what will happen next.

He writes:

I am a 75 year old male staying with my daughter and grandson. I have been unemployed for over a year and have no fixed or active income to my name. I have an overdraft of R40,000 and a credit card debt of R64,000, all of which was granted to me a few years ago when I was earning a good salary. Since I have no fixed income, I cannot repay these debts. What will happen if I cannot pay anything to settle these debts? I cannot go into all the details of my situation.

Neil Roets, CEO of Debt bailout respond :

It is indeed a difficult situation. My advice would be to immediately start a conversation with the credit provider, to confirm if there is credit life insurance on your accounts, possibly including protection against loss of income.

Unfortunately, giving a more detailed solution is very difficult without more information. Still, in a situation like this, it’s best to be open to the credit provider with the circumstances to see what options are available.

Regarding what might happen, the credit provider would have the right to take legal action; it is therefore imperative to communicate the situation to the credit provider as soon as possible to see what options they would consider depending on the circumstances, according to the details.

Unfortunately, it is difficult to give specific advice, but one option for possible investigation could be to consider the option of sequestration, depending on the circumstances. Communicating in this situation with the credit grantor as soon as possible is essential to see what options they would consider regarding your situation, depending on the details.

Questions may be edited for brevity and clarity.