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Consumers with accounts in arrears left to legal collections

Debt Center

Covid-19 hit South Africans hard since March 2020 and left many consumers with challenges regarding the stability of income that was affected by the lockdowns. The lockdowns directly impacting on companies, the ability to keep their doors open, and coping with the strain of financial loss forcing them to cut down on salaries and rotate their workforce with short time to ensure all staff works shorter hours, which in turn had a direct impact on income. Many companies have closed their doors overnight, leaving employees destitute with no income.

We do not know for how long South African’s will be faced with the reality of the new normal and lockdowns affecting everyday living as it has over the past 17 months?

Banks helping struggling consumers

Many consumers qualified for personal debt payment breaks or credit life insurance debt cost payments. These breaks are now coming to an end. What happens now after the payment break of three months? Not being able to cover the contractual payment agreements, defaulting is imminent affecting the credit reports and scores, making it impossible to obtain further credit.

Many consumers applied for these payment breaks, which were granted with the onset of the lockdown level 4. In July 2021, these agreements are coming to an end, desperate to find a way in keeping their payments up to date. The reality is: what now?

Banks selected consumers that qualified for payment breaks.

Creditors passed by the option for assistance to those who were in arrears with their credit agreements at the time of the hard lockdown level 5 of March 2020. The recent lockdown level 4 left millions of consumers desperate for loans to cover their debt repayments. Loans with unregistered credit providers leaving them further financially destitute – not being able to cover the monthly debt obligations.

The aftermath of payment holidays or payment breaks.

Faced with the real impact of the payment holidays: increasing repayments of home loans, vehicle finance as well as unsecured credit agreements making these payments more expensive placing their budgets under further affordability strain.

Households are under further pressure due to the increase in the cost of living.

If you look at how the cost of living has increased, you can clearly see that this is also a factor in increasing the pressure families and individuals are feeling. General food prices, including meat, fresh vegetables, produce from farms and fuel prices, have all skyrocketed. Even the cost of switching on lights has become more expensive, putting strain on an already over-committed individual budget. Extended families have become the norm, because family members lost their jobs and are no longer earning an income, adding further burden on the members that are still earning an income with debt commitments.  For many income earners, life has become a challenge, doing their best to just keep their heads above water.

Visit our website and take our free financial calculator for an outcome: https://www.debtcenter.co.za/financial-debt-calculator/

Keeping life and credit life insurance covered.

Living on a budget today is vital and with the loss of life during Covid-19, one must ensure that their life cover remains up to date with monthly premiums. This will give one some peace of mind: your loved ones will be taken care of, should you become another number added to the Covid death statistics.

Family expenses are a priority.

The cost of living is no longer that affordable for millions with the economy under pressure. Where do you cut costs? One needs to look at this topic and stay open-minded. Where do you cut on expenses that are vital for everyday living?

You cannot cut out or dismiss the cost of living. Monthly, day to day food and grocery bill, water and electricity, communication, fuel, transport costs, rates and taxes, food for the animals, medical expenses, life insurance, credit life insurance, vehicle insurance, homeowners’ insurance, internet for virtual business, and email utilization, monthly debt obligations with registered credit providers. You cannot shrug off a vehicle service when it becomes due, as it could damage the engine in the long run, and having to look for a new vehicle when you can hardly keep your head above water, will only add to your current financial situation.

Plan to reduce expenses in the budget.

The fear of having your credit line affected by reducing your monthly debt repayments has left the consumer to keep this option as a last resort. You know when you have reached the point when your budget difficulties can no longer be ignored either return to where it was.

Consumer Debt Support has helped hundreds of consumers with debt restructuring, with only success stories. Reducing debt repayments becomes a way of living for a period of 5 years depending on the debt criteria of the applicants. No application has the same outcome, as all consumers do not have the same debt exposures.

CDS review consumers’ personal financial and debt situations.

How do we make a difference? We take your financial information and review how the debt can be structured into one affordable payment plan. Consolidation without making a new loan. Your personal financial affordability will be submitted to all the creditors, showing your salary deductions, family household expenses. How the debt repayments are structured, reducing the interest that will allow the debt to solve over a period not exceeding 60 months. Bearing in mind the home loan account and vehicle finance account is not structured over 60 months.

An emergency fund is included as per the affordability of the consumer’s budget and motivated creditors. Making provisions for vehicle repairs, and other unforeseen expenses.

All applicants are screened whether we should notify the creditors for a further payment break and soften the blow of the financial strain. This helps our clients to focus on work or finding work and getting their lives back on track.

Including accounts that already are in arrears.

The good news is that consumers who are already in arrears with their accounts, vehicle, home loan, and all other unsecured credit agreements can contact us for immediate assistance. Where the creditor’s credit life insurance lapsed, we underwrite a new policy for you with retrenchment, death, and disability cover. We review your income protection cover; we know most times the current policies were lapsed due to affordability.

Once the creditors issued a summons, it is too late for us to negotiate a restructuring payment of your accounts.

 

Consumer Debt Support

We assist our clients with one-on-one or telephonic interviews to assess and assist with a personal debt solution that suits the individual’s needs and legal options. We act where creditors have proceeded with collections on accounts in arrears and threatening forced vehicle surrenders, account handovers, and threats of repossession of homes. Our main objective is to bring relief to the consumer, communicate with the creditors, and enforce our clients’ rights under the National Credit Act.

Once the consumer agrees to our services the relief is within 24 hours and any Voluntary Surrender enforcement of a vehicle in arrears is stopped. All creditors participate in the process to assist the consumer.

Our services

We offer debt counseling to anyone that are struggling to pay accounts. We screen all applications for reckless credit, negotiating with those creditors to settle the matter. Consumers that are ready to exit the debt review program we assist where the outcome is positive. Our debt counselors offer support in budget management to our clients and consumers seeking help with only a budget. We have a good functional aftercare center, here we process new applications and all other aftercare services to our clients and creditors. Our staff are very friendly and always helpful, they have compassion understanding the stressful process our clients are going through. #debtcenter #registereddebtcounsellor #oneeasypayment

Visit our website leave your details, one of our consultants will contact you: https://www.debtcenter.co.za/contact-us/

Consumer Debt Support has been in business since 2009 and registered with the National Credit Regulator NCRDC2452.

Warning to consumers to deal with registered practitioners only.

The NCR made sure consumers can access a portal where debt counselors and credit providers can be screened for valid registrations.

One registration is valid for a 12-month cycle, after the 12-month cycle if the registrant has not renewed the license, it would expire, and the notice is updated on the portal.

When you talk to a lawyer you will also check whether the person dealing with your legal matter is in good standing with the Law Society and may appear before the court.

This link to find your debt counselor or credit provider is: http://www.ncr.org.za/register_of_registrants/

Debt Stricken consumer
Overcommitted consumers struggling to pay their debt

In Conclusion:

Consumers are facing the daunting task to search for the right debt counselor and company. So many consumers end up with the wrong debt counselor, as they need the personal touch from their debt counselor from start to finish. Consumer Debt Support is not a large debt counseling company. We believe in the personal journey with our clients and communication with your debt counselor is a valued service added to your personal debt solutions being dealt with our office. There is nothing more stressful than not knowing what is going on. The banks are mandated by the NCR to work with registered debt counselors to assist consumers struggling financially. Finding solutions to make payments more affordable will benefit sustainable living expenses and improve personal living.

 

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