# Regulatory Compliance Category > National Credit Act Forum >  Getting out of debt

## Dave A

It looks like credit providers are coming to the party with debt relief mechanisms that could work - if the debtor makes the effort too!



> The indebtedness of consumers is soaring as the local economic outlook continues to sour, but there may be hope on the horizon.
> 
> Over 41% of all credit accounts belonging to the 17,56-million credit active South Africans are delinquent, according to the newly launched National Debt Mediations Association (NDMA), set up under the auspices of the National Credit Act. 
> 
> In addition, the portion of household net disposable income that is applied to service debt is at an "alarming" average of 75%. 
> 
> But the credit industry, including banks, debt counsellors and payment distribution agents, under the auspices of the NDMA, has created a debt review process that will enable over-indebted consumers to deal more effectively with their bills.
> 
> Simply put, the proposed review process obliges credit providers affiliated to the NDMA to offer customers a step-by-step programme to renegotiate their mortgages, vehicle loans and short-term loans, says Tjaart van der Walt, CEO of the NDMA.
> ...


Personally I think that looks quite promising.

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## Marq

These figures and the proposed rules appear to be no different that the numbers and rules that were around in the 80's....and the 90's and last few years.

Extension of term does not really help anything - at a 13% bond you are saving about R60pm per R100k outstanding. No real saving. We tried this with the low cost housing finance scenarios in the early 90's without any success. All it does is delay the inevitable and make the mortgage bond holder really miserable for another 10 years.

Holidays on instalments also just delay the inevitable as the new higher instalment kicks in a year down the line with a heavy impact. People in debt tend to continue to spend spare cash and do not save. They will minimise the instalments due and spend the spare cash on a holiday (well deserved after this pain isnt it) or may a new outfit (I really deserve this after having gone without for two months now) or splash out at the local fancy restaurant toasting the success of having beaten off debt once again.

Having seen this so often, I think the the only rule to be applied is rule one -  applied strenuously and fairly through some sort of friendly administration if you are in deep trouble or just some self governing scenario if you are not. Rule 2 onwards is just about making excused for the inevitable.  

If you are saying that its easy for me just to just say this stuff - I have been there. 10 years ago had huge judgements against me, no job and prospects of being a total failure. Through some discipline and hard work and a vow never to go under - it took 7 years to come back into a positive situation again and since then, never looked back.

Remember - Mort = Death - Gage = Grip - thats what the banks have you in  - a deathgrip. Avoid debt and live free. Its hard to save and the time just drags on and on, especially when one is younger - but its really worth it in the long run.

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Dave A (01-Jun-09), Morticia (01-Jun-09)

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## Dave A

> People in debt tend to continue to spend spare cash and do not save. They will minimise the instalments due and spend the spare cash on a holiday (well deserved after this pain isnt it) or may a new outfit (I really deserve this after having gone without for two months now) or splash out at the local fancy restaurant toasting the success of having beaten off debt once again.


I have to agree this is the core of the problem.



> If you are saying that its easy for me just to just say this stuff - I have been there. 10 years ago had huge judgements against me, no job and prospects of being a total failure. Through some discipline and hard work and a vow never to go under - it took 7 years to come back into a positive situation again and since then, never looked back.


So you're also a member of the "I dug myself out of sh*t" club, Marq. Well done.  :Thumbup: 

I wonder how many of us there are round here?

I was thinking - this is as much about behaviour change as anything else. It's a mindset. Maybe if we could just tell people how good it feels when you get out from under that weight and that the discipline it takes is soooo worth it.

But then, until you've been seriously flogged by the system, do you truly appreciate the issues enough to make that behaviour change?

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## Marq

> until you've been seriously flogged by the system, do you truly appreciate the issues enough to make that behaviour change?


Thats the other unfortunate truth to this scenario. Rock Bottom and in some cases the center of the earth has to be touch before the wake up call strikes home. We all like our comfortzones and stay there as long as possible. 

As long as one can see the good come out of the bad and have a vision (not a plan to make a plan :Smile: ) anything is possible.

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