Battling the Debt - 08-04-09

August 4 - Using the new Consumer Financial Vulnerability Index, it was shown that half of all South Africans have problems paying their bills.

As such, many South Africans battle to settle their home loan and car loan debts.

The Minister of Finance, Praving Gordhan, said that South Africa scored 5.14 on the Index, which uses a scale of zero to 10, with zero indicating maximum financial security.

In comparison, Sweden scored 0.4, while Ireland scored 3.4.

So what can South Africans do to avoid having their homes repossessed and battle the mounting debt?

Analysts warn that consumers should avoid 'quick fix' solutions that are advertised in the local press. Even the ombud has issued a press warning entitled "Credit Repair? Beware", telling consumers to avoid those promising to clean up an individual's credit report to make it easier to obtain a home loan or a job. The ombud said that in most cases, individuals can do the work by themselves for free and thus avoid getting themselves even further into debt.

Help could be sought from counselors whose job it is to show people how not to overspend and to work within their budgets.

And finally, consumers should talk to their bank to try and work out a settlement plan if they see the bills piling up around them and start to despair.