Debt Counselling Firm Reports People Now Over-indebted Sooner

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Deeper In Debt Sooner

A large Debt Counselling firm has shared some stats showing that among the people who are applying for debt review help the number of accounts that people have before needing help has dropped. What does this mean?

This means that even with fewer accounts people are still running into a financial brick wall of overwhelming debt.

No longer is it a case where consumers have dozens of smaller debts but now with only a few accounts, they are in trouble.  This is partially because (1) they are able to borrow larger amounts from these few credit providers but also it shows that (2) consumers are more vulnerable now to economic pressures than previously. Food and transport and other related costs are so high that they find themselves struggling even without opening lots of accounts all over the place.

Those Earning R20 000 a Month

The firm reports that the average age of people asking for help is in their mid 30’s and that consumers who earn R20 000/month have committed to paying back a year and a third’s entire net salary towards their various debts (133% of their net annual income). The firm also reports that those who earn R5000 or less have debt payments of about R3150 each month. This leaves them with R1850 or less to pay all their other bills with. For most, this is simply impossible and so they begin to duck and dodge their creditors and default on their debts.

More homeowners are reaching out for help with the firm seeing an increase in debt review applications from this group of consumers increasing from the usual 49% up to 56%.

Get Help Sooner

With debt, it is certainly better to get help sooner rather than later (like many things). The deeper in debt you are the higher the payments towards interest and fees are each month. Switching to a cash lifestyle and paying off your debt through debt review can be a dignified and reasonable way to deal with your debt in a short time period.