The more money you are able to pay on your outstanding debt – the sooner you will become debt free.
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A Fin24 reader who was granted a credit card and an overdraft facility a few years ago while earning a good income is now unable to pay toward settling his debt due to unemployment. He wants to know what will happen next.
He writes:
I am a 75-year-old male who stays with my daughter and grandson. I have been unemployed for over a year and have no fixed income or assets in my name. I have an overdraft of R40 000 and credit card debt of R64 000, all of which were granted to me a few years ago when I was earning a good salary. As I have no fixed income, I cannot service these debts. What will happen if I can't pay anything to settle these debts? I cannot go into all the details of my situation.
Neil Roets, CEO of Debt Rescue responds:
This is indeed a challenging situation. My advice would be to immediately start a conversation with the credit provider, to confirm whether there is any credit life insurance on your accounts, potentially including loss-of-income protection.
Unfortunately, giving a more detailed solution is very difficult without more information. Still, in a situation such as this, it is best to be forthcoming to the credit provider with the circumstances to see what options are available.
Regarding what could happen, the credit provider would have the right to proceed with 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 regarding the circumstances, depending on the details.
Unfortunately, it is difficult to give accurate advice, but an option to possibly investigate could be to look at the option of sequestration, depending on the circumstance. Communication in this situation with the credit provider as soon as possible is critical to see what options they would consider regarding your circumstances, depending on the details.
Questions may be edited for brevity and clarity.
