Report Shows Consumer Defaults on Bonds Are Up
A recent report from credit Bureau Compuscan shows that more people than ever are defaulting on their bond repayments. This is significant since consumers with debt will almost always prioritize their bond over other types of debt repayment. They will skip payments on credit cards, clothing accounts , short term loans and even vehicles before missing a home loan repayment.
As such when we see an increase in these types of defaults we know that these consumers a stretched beyond all means of managing their cash flow and debt repayments.
This is leading to the banks taking more and more legal action against home owners to get the court to allow them to evict these home owners and sell their home on auction to the highest bidder. Due to the lack of regulation in regard to minimum requirements for house auctions this means that some consumers homes have been sold for as little as R1000.
In the months of April, May and June this year, the massive figure of, over 23 300 people received a judgment against them relating to their homes.
It seems that those with the lowest value homes are the hardest hit as Compuscan report that 39% of all mortgages of R300 000 or less have been subject to adverse enforcement.
The wealthy are not exempt though as the stats show that enforcement among the bigger price range homes is also climbing as these consumers too have begun to run out of wriggle room.
The report from Compuscan also shows that there has been a dramatic 20% spike in non payment on revolving loans/ credit facilities.
People with cars valued between R100 000 and R250 000 were shown to be the most likely to default on their VAF.
Get Professional Help
If you are struggling to repay your home loan do not take any chances and rather approach a registered professional Debt Counsellor. They can work with your creditors and the courts to reduce payment on all your debts (incl your home loan) to enable you to manage your monthly running costs at home and also service your debt over a reasonable time period.