Debt Review: Is it Right for You? Part 3

Debt can happen to anybody. Perhaps you have been brought up to believe that money problems escape the affluent or that debt problems only happen to low-income families. You may be a person of high-income struggling with over-indebtedness yourself. If you have found it difficult to reach out for help, we want to reassure you.

Even among the highest earners, over-indebtedness can – and does – happen.

Whilst nobody intentionally becomes over-indebted, circumstances do not always line up as we have planned. There is help for everyone. If you are or were a high earner struggling with debt, read Andy’s story below.

This is Andy’s* story – a married father of two with a high income.

At 40 years old, Andy was flying high. A father of two, Andy was married ANC (out of community of property). He was earning well and spending big. His money problems started when he was downsized at work shortly after buying a house that (even he) could barely afford. On a reduced income, Andy could not afford to keep his new home, and he could not afford to sell it either. In a bid to protect their investment, Standard Bank offered him a private overdraft, a mortgage extension, several personal loans and then an ultimatum: Debt review or foreclosure.

By this time, Andy had maxed out credit cards from every major lender. The initial debt review negotiations were arduous.  Regardless of how hard Andy tried to make it work, debt review was not enough to enable him to keep the house. His other creditors felt disadvantaged and threatened to terminate. Eventually Andy was fortunate enough to sell the house through a friend who provided the bridging finance necessary to cover clearance certificates and transfer costs.

“Overall, this has been a humbling, but positive, experience. The biggest obstacle was my wounded pride and being able to admit that there was a problem I couldn’t solve on my own. I felt like a failure. But our relationship and family are much stronger. We have pulled together. We have become extremely cost conscious. Our focus has shifted to quality of life. We moved to a smaller, more affordable home. We spend much more time together at the beach or playing games at home. There are a lot of old habits we won’t return to once this is all over!”

~ Andy

Andy has just completed his first year of debt review and he will be debt free within another two years.

“I love feeling free of financial pressure for the first time in years. I am now directing my competitiveness towards getting out of this as soon as possible. I would recommend it to anyone. The only thing I would have changed is the length of time it took to get that initial court order!”

~ Andy

Do you relate to Andy’s story?

If Andy’s story does not ring close to home for you, next week’s might. Our debt review clients are diverse, and many of them are just like you. Don’t miss part 4!

*To protect his privacy, we have not used his real name.