Ntebo writes: I was unemployed, and then fell behind with my debts. I have found a new job now and intend settling all my debts this year, but I don’t know where to start as I am already behind with a lot of my monthly installments. I am not sure if a consolidation loan would assist.

Maya replies:

If no legal action has taken place and you are now in a position to start repaying all the installments on your debts, then you need to engage with your creditors pro-actively. Contact each creditor and find out what your new installment amounts will be – keep in mind that these may have increased as you have fallen behind on your repayments.

If you have several credit agreements it may be helpful to utilise the services of a debt mediator who can speak to your creditors on your behalf. A good starting place would be the National Debt Mediation Association (NDMA). You can visit their website or call them on 0861 11 6362.

If the installments have increased significantly then you may want to re-negotiate the time frame of the repayments to lower the monthly installment, however the best strategy is to repay as much as you can afford in order to avoid those interest charges.

If your credit record is still intact, debt consolidation could be a good option in your case as your financial issues were caused by a life event – losing your job – and not due to bad financial habits. Debt consolidation will allow you to take out a single loan and repay all the outstanding debt and then only have one loan to repay. Make sure you are dealing with a reputable credit provider and do the maths to make sure that your total loan repayments on the consolidated loan do not exceed what you would have paid separately to the various credit providers.

This article first appeared in City Press.