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1. Stop your reckless spending to get out of debt

by , 30 January 2013

Reckless spending is a surefire way to find yourselfoverwhelmed by debt. But you're not alone - even debt counsellors can take drastic measures to get out of debt. Four debt counsellors have just been deregistered for contravening the National Credit Act. If your spending is starting to get out of control, check if you have the four symptoms of reckless spending and take action now!
Even debt counsellors need a little financial help.

Four debt counsellorshave been deregistered for contravening the National Credit Act for not handing money they collected from consumers under debt review over to credit providers.

One of them even borrowed money from his debt review clients,Moneyweb reports.

And while debt counselling can help you hold on to your assets, it still doesn’t “address the underlying problem about the sometimes reckless [spending from] which South Africans incur debt,” adds Neil Roets, CEO of national debt counselling firm Debt Rescue on the SowetanLive website.

But how do you know if you really do have a problem with reckless spending?

Chronic or reckless spending is an addiction, says Karin Iten of FSPInvest.

And if you suffer from one or more of these ‘symptoms’, you’re in danger of being overwhelmed by debt:

Four signs you’re in danger of being overwhelmed by debt from your reckless spending

  1. You continually overspend your budget and use your credit card limit to get you through to the end of the month.
  2. You're always borrowing money to make it to your next payday.
  3. You use this month’s salary to pay off last month’s debts.
  4. Your repayments only ever cover the interest charges on your account, but never manage to reduce the actual amount.
It gets worse. Pawn brokers are reporting record business from indebted individuals pawning everything from vehicles to flat screen TVs, confirms the SowetanLive.

But it’s not just you.

Many retailers encourage consumers to incur debt that that they know they can’t afford to repay.

Here’s how the National Credit Act can help you get out of debt

When it comes to debt, “ the National Credit Act… comes into good stead. If it can be proven in court that a credit grantor extended credit recklessly, that debt can be cancelled by the court,” assures Roets.

If you’re in danger of being overwhelmed by debt, Roets suggests you ask your debt counsellor about the in duplum rule, as it “prevents outstanding debts from accumulating to many times the original figure as was the case in the past”.

Check if you’re in danger of being overwhelmed by debt. If so, consult a registered debt counsellor immediately to start the debt review process and you’ll soon be  on more stable financial ground.

1. Stop your reckless spending to get out of debt
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