First thing to do when you cant pay a debt.
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 Interest rates in South Africa have steadily increased 9 times by a total 4.5% in the past 18 months and there is the realistic threat of more increases in the very near future. Petrol prices have spiralled upwards almost beyond belief, making lift-clubs and share-drives not just convenient but an absolute necessity. Adding to the overburdened consumers’ already limited, or in some cases severely strained, budget is the cost of food that is at an all time high.
If you find yourself in a position where you are finding it if not difficult, but down right impossible to keep up with payments due on your house, car, HP loans, credit cards etc. there is help available to you. The first and most important fact to remember is that you are not alone. There are others in the same boat as you who are also battling to keep their heads above water in this difficult financial time that we find ourselves. But where do you turn?
The first thing you should due is to contact the companies (creditors) to whom you owe money, the bank where you credit cards are held and the institution that granted your home loan. And any other creditor on whose payments you find yourself defaulting. The old adage that says ‘Honesty is the best policy’ really holds true. The bank does not want to see your house being repossessed or your car being driven away by an agent of the court for repossession.
If you contact them and explain your predicament they will be more willing to lend a sympathetic ear and come to an arrangement with you for you to settle your debt. They might agree for you to take a ‘payment holiday’ where you are granted perhaps 1 or a few months grace from making payments on outstanding loans or they might agree for you to repay a reduced amount (say 70% of the repayment) for an agreed period of time. Another option is to pay the debt off over a longer period (for example by converting your 20 year home loan to one that is payable over 30 years).
It must be noted though, that you will in the long term end up paying more on interest charges on a loan that is paid off more slowly or over a longer period of time. These are just a few examples of the kind of assistance you could expect to receive, but only if you ask. Creditors do not know the personal circumstances of their individual customers and they will not offer the same assistance to all, as there are customers who, even though times may be tough for them, are not over-extended to the point where they are not able to meet repayments on their loans. So the best thing for you to do is to pick up the phone or go into the bank and be honest. |
Debt Blog 