Debt. It’s something many of us face, whether it’s a home loan, personal loan, credit card, or car repayment. For many South Africans, the burden of debt can quickly overwhelm their finances, especially when salaries feel like they’re being swallowed up by monthly repayments. When debt begins to take over your income, it can lead to stress, missed payments, and a growing sense of financial insecurity.

If you’re wondering whether your salary is being consumed by debt, you’re not alone. In South Africa, rising living costs, inflation, and economic pressures have led many people to rely on credit just to make ends meet. The good news is that if you’re finding it difficult to manage your debt, debt review can provide a lifeline to help you regain control.

How to Tell if Your Salary is Being Swallowed Up by Debt

The first step in addressing debt is recognizing whether it’s overwhelming your finances. Here are some signs that your salary might be getting eaten up by debt:

1. You Struggle to Make Ends Meet

If you’re constantly short on cash by the time your next pay check arrives, it’s a sign that a significant portion of your income is going toward debt repayment. Many South Africans are stuck in a cycle where they’re paying debt but unable to cover living expenses like groceries, transport, or utilities.

How to Tell:

• You’re regularly overdrawing on your bank account.
• You rely on credit to pay for essential expenses.
• You have to borrow money from family or friends to get by each month.

2. Your Debt-to-Income Ratio Is Too High

Your debt-to-income (DTI) ratio is a measure of how much of your income goes toward servicing debt. Ideally, no more than 30-40% of your monthly income should be spent on debt repayment. If your DTI is higher than this, it’s a clear sign that your debt load is unsustainable.

How to Tell:

• More than 40% of your income is going toward servicing debt (this includes loans, credit cards, etc.).
• You’re struggling to save for emergencies or long-term financial goals.
• Your monthly debt repayments are impacting your ability to pay for necessities.

3. Your Credit Card Balances Keep Growing

Credit cards can easily become a major source of debt if not managed properly. If your credit card balance is consistently growing and you’re only able to make the minimum payments, you’re paying mostly interest and not reducing the principal. The longer you carry a balance, the more interest you’ll accumulate, making it harder to get out of debt.

How to Tell:

• You’re carrying a high balance on your credit cards month after month.
• You only make minimum payments, which barely reduce the principal balance.
• You use credit cards to pay for things you can’t afford upfront.

4. You Miss Loan Repayments or Get Penalized for Late Payments

Missing payments on loans, credit cards, or bills is a major sign that your salary isn’t enough to keep up with your obligations. Late payments can result in penalties, higher interest rates, and damage to your credit score. If your debt is spiralling out of control, you may even risk repossession of assets or legal action from creditors.

How to Tell:

• You’ve received calls from debt collectors or have been sent late payment notices.
• You’ve been penalized for missed or late payments.
• Your credit score is negatively affected due to missed payments.

5. You Have Little or No Savings

When you’re unable to save, it’s usually a sign that most of your salary is being consumed by debt. Without savings, any unexpected expenses can throw your finances into chaos, forcing you to borrow more money and perpetuating the cycle of debt.

How to Tell:

• You have little or no emergency savings or retirement savings.
• Unexpected expenses (like medical bills or car repairs) put you in financial distress.
• You can’t seem to put aside money for future goals like buying a house, funding your children’s education, or building a retirement fund.

6. You’re Under Pressure from Collection Agencies

If your debts have become so unmanageable that they’ve been handed over to collections, this is a serious red flag. Debt collectors are aggressive, and repeated calls, letters, or even threats of legal action are signs that your debts have become unmanageable.

How to Tell:

• You’ve received letters or phone calls from collection agencies.
• You’re being threatened with legal action or garnishment of your wages.
• You have court judgments against you for non-payment of debt.

How Debt Review Can Help

If you’re feeling overwhelmed by debt and unsure how to manage it, debt review (also known as debt counselling in South Africa) could be the solution. Debt review is a legal process regulated by the National Credit Act (NCA) that helps consumers take control of their finances and avoid the negative consequences of unmanageable debt.

Here’s how debt review can help when your salary is being swallowed up by debt:

1. Lower Monthly Repayments

One of the main benefits of debt review is that it allows you to restructure your debt into affordable monthly payments. Debt counsellors work with your creditors to negotiate lower interest rates and extended repayment terms. This reduces the pressure on your monthly budget and allows you to keep up with repayments while avoiding penalties.

How it Helps:

• Your monthly repayments are reduced to an amount that is more in line with your income.
• You won’t be required to pay more than you can afford, which helps prevent missed payments and late fees.
• You’ll have a single, manageable monthly repayment instead of juggling multiple debts.

2. Protection from Legal Action

When you’re under debt review, creditors are prohibited from taking legal action against you to collect the debt. This means you won’t have to deal with repossession of assets or garnishment of wages. Debt review provides you with breathing room while you work toward settling your debt.

How it Helps:

• Debt collectors cannot harass you, and legal action will be suspended while you are in debt review.
• You won’t risk losing your assets, like your car or home, due to unpaid debt.
• You’ll get peace of mind knowing that you’re under legal protection while resolving your debts.

3. A Structured Repayment Plan

Through debt review, a professional debt counsellor will create a structured repayment plan for you, based on your financial situation. This plan considers your income, essential expenses, and current debts, and ensures you’re paying off your debts in an affordable and sustainable manner.

How it Helps:

• Your debt counsellor will negotiate with creditors to restructure your payments and reduce interest rates, where possible.
• You’ll receive a clear and realistic plan that allows you to pay off your debts over time while still meeting your essential needs.
• The plan is tailored to your financial situation, so you’ll know exactly what you need to pay each month.

4. Improved Financial Literacy and Support

Debt review isn’t just about paying off debt—it’s also about learning how to manage your finances better moving forward. Debt counsellors can provide you with valuable advice on budgeting, saving, and managing money, so you avoid falling into the same debt traps in the future.

How it Helps:

• You’ll receive advice on how to create a sustainable budget and manage your finances more effectively.
• Debt counsellors can help you develop healthier spending habits and plan for the future.
• You’ll learn how to build an emergency fund and avoid relying on credit for everyday expenses.

5. Debt Settlement and Relief

At the end of the debt review process, you’ll have settled your debt in full. This will allow you to start fresh with a clean financial slate, free from the burden of unmanageable debt.

How it Helps:

• Once you’ve completed the debt review process, your debts will be paid off, and your credit will be restored.
• You’ll be able to move forward without the constant worry of debt hanging over your head.
• Your financial future will be in your own hands, with the lessons learned from the debt review process guiding you towards better financial habits.

Final Thoughts: Act Today

If you’re feeling like your salary is being swallowed up by debt, you don’t have to continue suffering in silence. Debt review offers a structured, legal way to regain control of your finances and free yourself from the stress of overwhelming debt. By addressing the root of the problem and negotiating more affordable repayments, debt review can help you get back on track to financial stability.

Remember, debt isn’t something you have to face alone. Seeking professional help through debt review is a positive step toward regaining financial freedom. Whether you’re struggling with credit card debt, personal loans, or car repayments, debt review can help you take back control of your salary and start rebuilding your financial future. Contact Zero Debt today for a free no obligation assessment of your debt by a professional Debt Counsellor.