Question:
My debt is more than my income. I've landed in this mess due to greedy bank consultants promoting good money savings products, but at the end of the day I land up with too much debt.

I've opened an One Account from FNB last year with rates lower than present over 20 years! They realised the mistake and my monthly payment is now much higher.

I cannot afford it anymore. What must I do? Please help, I'm about to lose it all and I'm 57 years old!

Answer:
If you opened an One Account the chances are you rolled all of your short term debt into one with your home loan. As short term debt is usually more expensive I assume you initially achieved lower payments. On the face of it your new payments on your One Account should be less than what you were paying before.

The danger with a consolidated account is that you now have access to your home equity and it is easy to overspend. I guess this is what happened to you. Also, the interest rates have risen, pushing up your monthly payments. So, you could have been overextended even if you did not go for the consolidation.

The only way to try and recover from this is to find savings in your day to day budget. In other words, cut back on everything to ensure that your home loan can be paid.

At 57 you cannot afford to lose your home. I know that you may balk at this, but if you have kids they may need to help you with covering the instalments for a while. This is a far better solution than having your home repossessed.

You could also try and find a part time job on the weekends; you need to fight this with all you have. Maybe you can move in with a friend or family member and rent your house out for a while, or even take in a lodger.

If you lose your house now, it may be sold for less than what you owe on it and you will be liable for the balance. It will adversely affect your credit record, meaning that you will not be able to buy another house. In addition, your age may be against you in terms of getting another 20 year bond.

The only other option is to go and get evaluated for debt counselling. They will do an assessment and if you qualify they will renegotiate your debt with your creditors. This will, in effect, stretch your debt over a longer period. You will end up paying more interest, but at least you will be able to cope better with the monthly payments.