Help - R60k Debt + Judgment

[tim71]

Gurus, need some help.

Long story less long, quite a few years back an investment property was purchased (cash) under my name by my guardian with the hopes of decent rental income for them and an asset for me when farther time eventually catches up to the guardian. After a bit of mismanagement and subsequent tenants/squatters who skipped out on rent the property has raked up R68k worth of bad debt with the body corporate for levies, electricity etc.

Naturally the body corporate has since whacked me with 2 default judgement on the debt which has KILLED my credit profile.

Here’s my conundrum - I would like to purchase a car and have this financed in my personal capacity, as I’m spending way too much ehailing back and forth to work (+- R5k). I’d honestly rather be spending that on a second hand vehicle monthly.

Obviously no lender will touch me with the judgement. But being 29, the car is an absolute priority and quite urgent one. I would honestly rather be spending towards a depreciation assets than ehailing.

What options do I have with the car being the priority considering the following:

Net income - R29k
Rental income on above property - R7.5k that’s going to guardian, but option exists for it to go to me to sort out above mess.

I was thinking something along these lines: 1) Loan against the property at ridiculous interest rate to purchase second hand car under R100k and I pay that off from income. Use rental income to pay off debt judgments. Assume this isn’t viable because of credit profile.

2) Loan against property to pay off debt + purchase car. Use income + rental income to pay off loan. Again, assume this isn’t viable because of credit profile.

Thoughts?

edit: spelling + grammar

 

[cami777]

@tim71 I lost my business a while back and had multiple judgements. I saved up a fair amount over 3 years and did a credit health. Those that got judgements I called up and offered a lower amount as a full and final payment which they accepted. Then take the full and final amount letter to an attorney and they need to go to court and rescind the judgement then your credit score will be fine again. As for the short term get a scooter that’s what I did

 

[strongarm5791]

@cami777 This is good advice. When I came back to SA from the UK I got around on a scooter for the first year. It was a brilliant solution until I could get on my feet here in Cape Town.

 

[vancouverguy]

@tim71 The rental property should not be paying out 7.5k to anyone while there is still debt with the body corporate and judgements against you.

Also how is this being managed? The property bought cash was gifted to you? The rental is taxed in your name then paid as a gift to the guardian?

 

[lostbutfound85]

@vancouverguy I also got lost down in that rabbit hole.

 

[strongarm5791]

@tim71 Is there any equity in the property? If there is, I would sell it, get out of the debt trap and improve your credit score before doing anything else.