MY FORMER neighbour committed suicide early this month.

Here was a young black South African in his mid-thirties, the very epitome of the new South Africa, dreadlocks and all, and on his way up the ladder of opportunity.

He was a professional engineer by training with his own practice and an accomplished Jazz Musician hailing from the Eastern Cape, the very royal birth place Rolihlahla Mandela.

My last exchange with him was in late September 2010. Like many of us during these slow economic times, he told me he was trying to keep it together.

There is something wrong with our socialisation as African people in general if a few financial mistakes are rapidly converted to life and death issues. There is intense societal pressure on upwardly mobile blacks to succeed at all costs.

I sensed the first sign of trouble when I saw his house on the Sheriff’s auction list in September 2010. I immediately knew the vultures were circulating around him. Then the banks went for his second investment property in the East Rand. The straw which probably broke the camel’s back was when they grabbed his Discovery 4x4 from him like a common thug.

As I grapple with what really went through the head of this young South African with a bright future when this happened, I have identified a few valuable lessons which can help those of us still in the land of the living.

The greatest danger is to consider ourselves immune and see debt as something which happens to some type of people elsewhere. The financial challenges and recession that many countries have gone through has made it easier to slide quicker into bankruptcy. Debt has become a harsh reality in our communities and the first step is admitting that it is a problem.

Anecdotal evidence shows that people who have been afflicted by problems like drugs and alcohol get out faster when they first acknowledge the problem. If you are spending more than you are earning, or you spend everything that you earning without anything accruing to a nest egg, then the alarm bells should start to ring in your mind.

Many of us are living on borderline bankruptcy and just a small push like losing your job you thought was for life, sudden illness or death in the family, could trigger a rapid series of events which can leave you in the pit.

A study done in the USA by Harvard researchers found that most people do not prepare for the unexpected and 62 percent of all bankruptcies were caused by medical bills and 78 percent of those were people who had medical aid and insurance.

The universal law tells us that if you find yourself in a hole, the first step is to stop digging. Beating yourself up will not increase your income to cover your debts. You should always start with “those little foxes which ruin the vineyard”.

They include accumulating credit card debt on flimsy luxuries like gourmet lunches and paying the absolute minimum at the end of each month generating a massive interest rate bill on your debt.

Earlier this year, I had a discussion with two Zimbabweans who had their houses auctioned by the Sheriff in South Africa. I have attended a couple of Sheriff’s auctions and the trend I noticed in the last few years is that people from our Zimbabwean communities are increasingly populating that list.

For some of us coming from backgrounds where we simply ignore problems hoping that they will go away, unfortunately debt cannot be solved by ignoring it.

If for one reason or another you cannot pay your mortgage, the first thing is to inform your bank manager. It is better to get the bank to extend your payment period from 20 years to 30 years so as to reduce your monthly installment to what you can afford until your financial situation improves.

When debt started biting, some simply relocated back to Zimbabwe leaving things unresolved. There is a huge possibility that in this region we are moving into a common economic community so soon it will be possible for debts incurred in one locality to find you easily even if you run back home.

In South Africa, the obligation of the Sheriff is to sell to the highest bidder not necessarily to solve your debt problem. The Sheriff can gladly accept R600,000 ($86,000) for a R1 million ($143,000) property.

While we quickly wash our hands and try to move on, some of us may not be aware that after getting the R600,000 from the Sheriff, the bank still expects you to pay the R400,000 owing and they will put this blight against your name.

When things start to happen for you a few years later, they can still come after you for the R400,000. You are actually better-off selling your R1 million house at a loss for say R850,000 and still have a R150,000 than to leave it to the Russian roulette of the Sheriff.

One way to buffer your home loan for unexpected shocks of life is to create equity in your bond. If you are required to pay a monthly mortgage of R6,000, you could cut off several years from your loan by just increasing this to R6,500 monthly.

With most loans attracting around 9% interest in South Africa, increasing your repayment is much better than putting the extra R500 into a savings account where you will probably earn just 5%. The advantage of equity is that it can be made available in the case of family emergencies.

Keeping up appearances like that old British comedy may be socially acceptable to fit in certain circles but could ultimately ruin you and push you to the edge of bankruptcy. When you come crushing down, the same people you were probably trying to impress will convert you into a dinner table topic of discussion.