Question:
I am a student and already have financial problems. I have an Edgars and Woolworths account which I can’t pay. Both my accounts were sent to the collection agency. My parents are also in financial difficulty and cannot pay for me. Presently they are still paying my Medi-Clinic bill.

It is an enormous amount. I don’t know what to do. Medi-Clinic is threatening to take my parents' furniture if they do not pay. Is there some way that this amount can be reduced? Please help.

Answer:
Firstly — and I know you already know this — you should not have debt on clothing accounts when you are a student with limited income. So the first thing you need to do is stop spending.

If you are not working, now is the time to get a part-time job so you can at least pay your share. You need to see a debt counselor right away. You must realise, however, that when the counselor puts you on a plan, you will not be able to get more credit and it will have an adverse effect on your credit rating going forward.

With regards to your parents, they may also need to go and see a counselor to relieve them of some of the pressure. The debt counselors will negotiate with creditors on your behalf and will hopefully be able to get a reduction in payments for you.

Savings spree needed

I hate sounding like a stern school teacher but, from now on, be sure that you can afford your commitments. At the end of the day, if you have to buy clothes on credit, it means you cannot afford them. I am sure you have enough clothing to last you for the next two or three years.

You now need to go on a savings spree. You are young enough to recover from this but your parents may not be; you need to get yourself back on track and be prepared to help them.

Inevitably this will mean personal sacrifice of lifestyle and financial freedom but it is a lesson well learned and it should stop you from getting into trouble further down the road. Log onto www.ncr.org.za to find a counselor in your area.