How to Organise Reduced or No Debt Repayments Due to Lockdown
Covid-19 Payment Holidays: What Your Debt Counsellor Needs From You
Almost everyone who is under debt review has been hit by the effects of the Covid-19 Pandemic. There are few who can say that their income has not been negatively impacted.
If you were able to scrape together enough to pay your full (or 3/4) of your debt review payment last month, but now find that after 5 weeks in lockdown that you will not be able to make a payment what do you do?
‘Rule one of any crisis is to talk to your Debt Counsellor’
Rule one of any crisis is to talk to your Debt Counsellor. So, do that. Call them up. Speak to the Debt Counsellor now and discuss your options.
They will share with you the steps that the banks have put in place to assist their clients under debt review. Primarily this is to make contact with them and ask for a payment holiday or payment reductions where you are still able to earn a little.
Info Required To Obtain a Payment Holiday
The Debt Counsellor will ask you for some info to help with the application to the credit provider. This will include info about your current income – which may be zero, in which case you get a letter from your boss. It could also be a motivation letter explaining how the Pandemic has affected your business negatively and how sales have dropped off if you are self employed. In some cases it may even be something from your bookkeeper. This info will then be sent with a form called a Form 17.3 [Read about that Here] to all your credit providers’ debt review departments who will look over the info.
Please note: If you will be claiming from the TERS fund or UIF then you should disclose if you will receive a payment of some sort (which you may not know now but if it does happen please let your DC know).
The banks recognise that a full month without income does not mean that you only need to skip one payment. They realise that you have other obligations that have been impacted such as paying rent or even just buying needed food and medical supplies. This is why they are often supplying concessions (which they are not obligated to make) for up to 3 months. This saves the consumers, Debt Counsellor and credit provider from having to discuss these matters at court level due to the changed circumstances.
‘this does mean that you will be paying your debts for longer’
It is good to note though that this does mean that you will be paying your debts for longer. In the case of accounts with higher interest percentages, this could mean paying back for several more months (not just the 3 you miss) at the end of the debt repayment plan.
Another option is to look at your credit insurance policies (those that you forgot you actually had). it is possible that the credit insurance you have from the banks or an outside insurance provider will cove repayment sin the event of you having (1) lost your job (2) reduced income due to something like the Pandemic. The credit providers may want you as the client to talk to the insurance people (rather than your Debt Counsellor). This is fine. You can do it.
Remember though, that just because someone tells you that your policy doesn’t cover anything, you should still ask for a copy of the policy for your records. You should insist on this and then be sure to ask someone you know, who is good at that sort of thing, to look through it and make sure the insurance people are not trying a fast one. Check your policies if/when you get them.
There may also be options like adjusting your insurance cover for a short while to bring down the premium [Watch video about that HERE]. This may help you save a little in the tough months to come.
Do That Now
Please do not assume that your Debt Counsellor will automatically do this for you. If you do not contact them they may assume that you are fine to make your regular, full payment. Then if you don’t they may stop providing you with their services or the credit providers might get angry and try to stop helping you through debt review and go back to suing you. If you can’t make your payment as usual then be sure to reach out to your Debt Counsellor today.