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Nowack & Olson, PLLC Florida Bankruptcy Lawyer
  • $0 down and low payment plans available. We can assist you without having to leave your home.

Can a Rotating Savings and Credit Association Help You Get Out of Debt?


These days, you can buy almost anything on a buy now pay later (BNPL) basis.  Not only can you use BNPL to buy consumer electronics or furniture, but you can also buy groceries and personal care items that, before economic long COVID hit, used to be affordable on your income.  Making a $50 monthly payment for six months is a lot more affordable than charging $300 on your credit card and paying it off with interest, especially since this option is not even possible unless you have $300 of available credit.  Since long before the days of BNPL, people have been cooperating with friends and neighbors to pool their money as a way of saving up for major purchases.  With enough forethought, you can use an informal community savings and loan club to make a financial move that will increase your creditworthiness.  For help strategizing about your short-term and long-term financial goals, contact a Plantation debt lawyer.

How and Why Does a ROSCA Work?

Wikipedia refers to this practice as a rotating savings and credit association (ROSCA), but even if you have not heard that term, you are probably familiar with the idea.  ROSCAs are found in almost every country in the world, and therefore they go by many names in many languages, including susu, merry-go-round, and partner hand, among many others.

A successful ROSCA must have a manageable number of participants, usually not more than 20.  It is best if they all know each other at least a little bit, rather than being strangers; this way, they trust each other and feel accountable to each other.  The ROSCA lasts for the same number of months (or weeks, or semimonthly pay periods, or however you want to divide it), as there are participants.  Each month, each member contributes an equal amount of money, and one member receives the total contributions for the month.  For example, if the ROSCA has six members and each one contributes $50 per month, then the first member gets $300 the first month, the second gets $300 the second month, and so on.  The ROSCA ends after six months.

How to Get the Greatest Debt Relief Out of Your ROSCA Payout

ROSCAs are popular because participation does not require you to have a credit history, a bank account, or a high income; all you need is a modest income and a small group of friends or extended family members who trust each other and want to help each other.  Getting a minor windfall, such as a ROSCA payout, can be the first step to improving your financial situation.  You can use it to get a secured credit card, open a bank account, or pay down a debt.  You could use it for a bankruptcy filing if the amount of money in the ROSCA is big enough.

Work With a Debt Lawyer About Making the First Move to Get Out of Debt

A South Florida debt lawyer can help you get the maximum debt relief out of a relatively small amount of money.  Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.


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