South Africans seek to manage finances
MORE South Africans are seeking debt counselling to turn around their finances, according to experts.
Paul Slot, president of the Debt Counsellors Association of South Africa said they had noted an increase in debt counselling applications. It is estimated 260 000 people are under debt review.
“We have seen a 10% increase on a month to month basis,” he said, but expressed concern that many indebted consumers were only applying for debt counselling when it was “too late”.
“Consumers are applying when it’s too late and in some cases, they apply when they can no longer make more debt,” he said.
With 24.08 million credit-active consumers in the country, the number of those with impaired records rose from 9.55 million to 9.67 million.
Consumer indebtedness is attributed to poor planning, higher interest rates and increased food and petrol prices.
Slot said those under debt review collectively repay credit providers 11730m every month, which he said was ” a reflection of the success of debt review”.
Debt Rescue CEO Neil Roets said they too had seen a rise in the number of people applying for debt counselling in recent months.
“There’ve been more and more people applying for debt counselling. They now understand that the process works and is reputable. We see a 10-15% increase year on year as more people are becoming indebted. It’s important people start applying for debt counselling as soon as you realise that you don’t have enough for your monthly expenses,” he said.
Slot said consumer education on the process was required.
“They need to be taught that when you apply late, it takes longer to get out of debt counselling,” Slot said.
The National Agricultural Marketing Council’s recent report showed the cost of 23 basic food items had increased by 11.8 % from R528.20 to R590.67 from August 2015 to August this year.
Consumers can get their debt under control
HIGHLY indebted consumers who can’t meet their monthly financial instalments can apply for debt counselling.
A debt counsellor will then alert creditors in a bid to get them to increase the length of the agreement or reduce the consumer’s instalment.
If all credit providers agree with a proposed debt restructure, the debt counsellor files an application with the magistrate to obtain a consent order which will then enforce the new arrangement.
The consumer’s monthly debt will be consolidated into one monthly instalment that will cover all obligations under debt review.
On average a consumer remains under debt review for 35 months.
This is the average time taken by consumers to repay their debt.
Hundreds of consumers currently receive a paid up certificate every month.