April 17, 2020

Managing Debt during a global crisis

debt during a crisis

We’re Here to Help

We understand that the current state of reality can cause uncertainty when it comes to finances, and in particular your debt. We’ve taken the time to answer some of your FAQs so that you can gain more clarity on how to proceed from here.

Can I pause my debt review until after lockdown?

No. You are still required to meet your payment obligations unless your employer has provided you with an official letter stating that you are either being retrenched or receiving only part of your salary.

I am only getting half my salary at the end of April. Will credit life cover me?

This may differ from cover to cover, so contact us immediately so that we can get in touch with your creditors on your behalf and advise you on the best way forward. Do not assume that cover is in place until you receive a written confirmation.

I don’t know if I’m going to be paid. What do I do?

Firstly, don’t panic. Next, call your employer or HR department and ask if you’re going to be paid this month. Depending on the feedback you receive, you may require a letter/proof from your employer/HR department stating whether you’ll be receiving no salary or only a portion of your monthly income.

I’m self-employed what can I do?

There are two avenues to explore in answering the question:

1. Income boosting options.

Income boosting options: If your business is unregistered, it can be assumed that no contributions were made towards UIF.

If the business is not registered, then your business would unfortunately not qualify for TERS (temporary employee relief scheme).

2. Debt payment options.

Many banks and lenders have announced temporary “payment holidays” that essentially pause expected debt repayments for a number of months. Each bank or lender has their own set of qualifying criteria in terms of who can take advantage of these payment holidays, so you are best advised to get in touch with the lender with whom you have a credit card and personal debts.

I’m under debt review. How will lockdown affect my repayment order?

Unfortunately, if you fail to pay any instalments under debt review, your creditors are entitled to exercise their rights to terminate the payment plan and proceed with legal action against you to enforce the rights in terms of the credit agreements.

What you need to do is urgently contact your debt counsellor and request them to apply to your creditors for an extension on the repayment term (Form 17.3) and communicate with your creditors accordingly.

You will need to provide proof of your change of circumstances by supplying your debt counsellor with a letter from your company with regard to any change in salary over the lockdown period and, if required, bank statements.

Got a question?