The reality of the COVID-19 crises has hit home for all of us, three months down the road of restrictions and senseless laws in our views, thousands of jobs losses and companies closing down, left a broken economy that brought South Africa to its knees. The horrific published statistics of the widespread virus and the rising death tolls have everybody talking, cautiously worried and the psychological fear of how long this will last. When we wake up in the morning or go to bed at night, the negative impact of the lockdown affected our everyday lives in the worse possible way, never did we imagine that we would lose so much in such an abrupt short time.
On the bright side of it all came the exciting news that most of us could return to work. The government opened parts of the economy at the beginning of June so that the people could start earning their wages again. A huge relief to know that people could now plan ahead and restart a newly formed budget so to speak, while for others returning to work will happen from the 29th of June, the first working week of July. While some sectors remain closed until further safety measures can be implemented, those consumers affected are still only receiving TERS and while others do not qualify for TERS.
Although the companies were able to open their doors and everybody felt inspired to become productive once again, the slow start and the huge losses they suffered, forced the employers to redundancies and retrenchments of their staff. Another hard blow and unforeseen aftermath that leads to thousands of people left with little to no income. While millions in debt with the silent fear of how to get out of the noose after the payment holiday was coming to an end. I had a lot of discussions with clients informing me that they had to accept a salary reduction, varying between 20% and 35% until their companies could return to a level of normal where they could afford to pay full salaries again. A necessary step to ensure the survival of their business.
Retrenchments and job losses due to COVID19
When you face the dreadful fact of retrenchment, the question arises how one will pay the debt without an income in the months to come. Our advice is to find out what kind of policies and insurances you have in place with your creditors and banks when it comes to unexpected situations like this. There are different types of life policies clauses included, like Insurance on credit agreements to cover instalments, or that could settle the accounts in certain cases. Best to make sure than to panic about the worse, the more you know the better you can plan ahead of how to survive and provide for your family.
Don’t ignore the early signs
It is so difficult to acknowledge that help is needed with paying outstanding debt. Millions of clients that have accounts with credit institutions and banks have nowhere to turn to for help after their payment holiday expires. Legal action and default letters will follow soon to collect on overdue payments, as creditors are in their right to enforce repossessions by their contractual terms and conditions of the credit agreements. Consumers that are struggling financially now, were most likely not over-indebted before the COVID-19 lockdown. Due to various changing factors out of their control, they are now facing over-indebtedness and not sure whether they could afford their contractual debt repayments after the 3-month payment break.
Financial factors affecting consumers ability to pay their debt instalments
The reason consumers are struggling to pay their monthly debt commitments is because of the TERS (Temporary Employer/Employee Relief Scheme) payment they receive. Some companies are able to assist their employees further with a small top up together with their TERS payments to cover more of their basic needs and traveling expenses. The wage cuts almost a third of the normal salaries resulted in unpaid bills and more debt arrears, while household expenses had to be restricted just to get by with the much smaller income. The financial impact is worse when one of the breadwinners in the household gets retrenched, and the expenses and debt commitments of the family have to fall on the other breadwinner’s income. One of the many industries who had suffered severely during the shutdown of the economy in this Lockdown time is the Tourism sector, especially the accommodation venues like hotels, lodges and guesthouses who were closed for three months with no income or budget. We have learned that most of the employees working in that field had no UIF benefits to claim, as it was never a deduction on their salaries, neither could those earning a commission bank on any assistance to get through the tough times. People lost the little income they had, with zero prospects of assistance to their debt or needs. This extremely difficult type of situations will lead to desperate consumers seeking the help and falling prey to unregistered and unscrupulous money lenders.
Tip of the day:
Stay away from making more debt during these uncertain times and visit us at www.debtcentre.co.za for professional assistance!
PROTECT your MONEY AND DEBT REPAYMENTS from unscrupulous FRAUDSTERS
There are hundreds of unregistered credit companies and loan sharks that abuse this dire time of shortage, to manipulate those desperate enough to seek their help unknowingly so that they could fall victim to fraudulent scams. Although they are not listed or authorised to operate as credit providers, they know the law well enough to impress the uninformed consumers with empty promises. They to convince the people to trust them to help with their debt problems the quick and easy way.
Don’t fall VICTIM to fraudsters, they offer:
- Too good to be true restructuring solutions
- Debt Review removals and exits with short cuts (there are no short cuts!)
- Personal loans and longer payment extensions
How to know if a company or individual is legitimate? ADR (DEBT MEDIATION), DEBT COUNSELLING, LOAN COMPANIES.
Visit the following website https://www.ncr.org.za/register_of registrants/index.html and verify whether the person or loan companies are registered with the NCR.
IF THEY ARE NOT REGISTERED —- walk away!
A REGISTERED DEBT COUNSELLOR is your safest option
When you employ someone to assist you with your over indebtedness, make sure that you deal with a NCR registered company like DEBT CENTER (https://www.debtcenter.co.za) that has a sound business model where consumers are part of the process. All the debt counselling companies must adhere to strict rules of conduct. The NCR monitors these companies annually and when found that they are not doing what they are supposed to or stealing consumers money, their licenses are suspended and they are removed from the register.
Take action before it is too late
By this time, you know whether you need the services of a debt counsellor. You have used all options available to you to pay less towards your debt, there is not much more you can do to get extended reduced payment breaks.
Accepting you need help is a big challenge to overcome
We have a soft approach to helping our clients finding the best solution to suit their personal financial needs.
- We will help you with a restructured and reduced payment plan that will fit in your affordability range.
- We understand the personal and family expenses needs that can’t be ignored or be dismissed.
- Creditors have service agreements in place to assist our clients that need urgent intervention when they no longer can afford the monthly payment plans.
- Ensuring internal debit orders with banks and other creditors are stopped before the next salary date is crucial for consumers to ensure they can buy food and pay rent.
- We offer short term options and up to 5-year payment plans, depending on what is most suitable for the client’s financial needs.
- We have various short-term and long-term industry partners that offer our clients insurance products, to assure that they are not discriminated against while under debt review with their home loan, vehicle finance or other unsecured credit agreements.
The financial relief is greater than the worry because the excess money you will have in your reserve cash flow after the DEBT RESTRUCTURING is paid, can now be added to the household budget for more basic day to day living expenses.
Test yourself with our unique financial calculator quiz on our website link now… https://www.debtcenter.co.za/financial-debt-calculator/ and you will find the correct outcome at the end.
The variable human factor where the consumers actual household expenses vs income has to be taken into account. This is why only a registered debt counsellor can give you a reasonable affordable payment outcome. The calculator will help you to assess your situation whether you need a debt counsellor.
Vehicle and Home insurance during credit agreements
Protecting assets during this time is a constitutional right any consumer has. When entering into a DEBT COUNSELLING APPLICATION and the debt is restructured to one new monthly affordable payment plan, it remains the debtor’s responsibility to keep the assets insured as per the contractual agreements. The creditor has the legal right to cancel any restructuring arrangement and terminate debt review when these conditions are not met by the client.
It is a very real threat to consumer’s financial wellbeing when they don’t do enough homework to ensure they deal with a REGISTERED debt counselling business, the REGISTERED DEBT COUNSELLOR is the only party that can finalise the payment plan before the applicant signs any documents.
There is a quote that states: “It is not the size of the company that counts but the type of service that is rendered.” DEBT CENTER is the HOME of Consumer Debt Support and Debt Eezy as we have a reputation that we uphold.
When you are not satisfied from the service from your current debt counselor, and you can’t get hold of them, you have the right to contact another debt counselor to take on your case. It is YOUR MONEY and YOUR DEBT so act responsible when you employ someone to act on your behalf.
Message from the author
Times have changed and so many friends, family and clients are left with the fear of their tomorrows. Struggling financially is an emotional DEBT-monster that swallows hard-earned money, leaving families hungry and exposed to criminals that want to take advantage. I pray for every household and may you have food on the table every day. Until next time, God bless you.