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Talk to Your Debt Counsellor Sooner, Not Later

Several common problems during debt review are often made worse by not speaking to your Debt Counsellor as soon as possible

Talk to Your Debt Counsellor

Whether you are in debt review or not, life continues and challenges will come your way. Unforseen economic challenges like those brought about by Covid-19 can hit without notice causing you to worry about being able to make your court ordered debt review repayment. Your landlord may decide it is time to sell the place where you are renting. Your mobile phone may be stolen by criminals. All such things will impact on your day to day life and even your ability to communicate with your Debt Counsellor, PDA or credit providers. They may also force you to make changes that will impact on your debt review.

‘A large number of issues in debt review can be mitigated by speaking to your Debt Counsellor sooner rather than later’

For many people, they just go ahead and make the changes needed and then only speak to their Debt Counsellor months after the event. By which time problems may have entered the debt review that could threaten all the progress you have made up till that point. It could end the entire debt review if left unchecked. It may in fact already be too late.

A large number of issues in debt review can be mitigated by speaking to your Debt Counsellor sooner rather than later. Let’s look at two such issues and consider how speaking to your Debt Counsellor as soon as the situation comes up is beneficial.

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Trouble Making A Payment

If you have been put on short time, had your employer send you home for weeks at a time or been forced to take a pay cut then this will directly impact on your income. Less income means that you may be prioritising daily expenses over monthly debt repayments. This is obvious. You need food on the table and electricity etc to get by. Many consumers who have such an unplanned drop in income do not speak to their Debt Counsellor when they first see trouble coming. Instead they make a decision based on their perceived needs at the time.

Often this results in them not having the needed monthly debt restructured repayment amount to their credit providers (via their Payment Distribution Agent). Some wisely pay what they can but others foolishly just miss the payment entirely.

If a few days goes by and no one complains immediately they may foolishly think everything is ok and they will just pick up payments next month as if nothing is wrong. This is nieve and unrealistic. It is obvious that the credit providers computers will pick up the missed payment and will start the process of them trying to get out of the debt review.

Though consumers will have been warned about missing payments and the results they simply hope for the best or perhaps forget how serious it is.

‘they simply hope for the best or perhaps forget how serious it is.’

What happens next is that, the credit provider’s computers generate a letter saying they are getting out of the debt review because the consumer did not stick to the agreement and court order and will begin to collect from the consumer like in the past, with pestering phone calls, smsm and eventually a summons to court. The consumers stress will begin again when that happens and they will invariably go running to their Debt Counsellor at that point to ask for assistance long after the fact.

They may now face legal action, judgements (which last for 30 years) and the reposession and sale of their assets like their car and home (depending on which account they missed payments on).


A Sudden Expense

A sudden unplanned expense can also leave consumers needing to spend money that they had set aside for debt review payments. When your car breaks down or your geyser explodes or perhaps your washing machine breaks down you may decide that you need to take immediate action to fix theproblem. This can result in not having the needed funds to make your regular monthly debt restructuring payment.

Missed payments can lead to credit providers leaving the debt review process and starting new legal action against the consumer. This will then increase their stress and can bring the entire debt review down. In many cases this results in the consumer owing a lot more money than they hoped or thought as the benefits of debt review are stripped from the accounts they have been paying and huge amounts of fees and interest are added back by the credit providers. Next, the collections calls and legal action begins with summonses and more.

In some cases, the car that broke down and debt review money was spent on ends up being reposessed and sold of on auction leaving the consumer without a car for the next few years.


A Change in Contact Info

It is not uncommon for people in South Africa to change contact info. This might be their address, their mobile number or perhaps their email address. Maybe their phone is lost or damaged and they simply get a new sim card and number. Perhaps they decide to move or they change jobs and thus email addresses. This is not unusual and normally they let their friends and family know about the changes.

What may present a challenge for people under debt review is when they move and the credit providers send important legal documents to their old address. Becasuse they are not aware of the legal document it can escalate to the point where a credit provider goes to court and the consumer is not even their to defend themselves. Next they can be surprised with a judgement and a huge bill from the credit providers attorneys.

Other consumers complain that they are no longer getting regular updates from their Payment Distribution Agent about how their money is being distributed each month. It might be that the emails are going to their old email address or the notification sms’ has gone to their old mobile number. It might even be the case that their Debt Counsellor is desperately trying to reach them with important information and they are not aware.


Talk To Your Debt Counsellor

If you see problems brewing due to a possible change in income your Debt Counsellor can reach out to your credit providers in advance and warn them. This may prevent them from trying to get out of the debt review. It might not prevent all of them from leaving and starting to send new lawyers after you but it might keep most of them in the process. It might even be the case that the credit providers are understanding and give you a months breathing room or allow you to make a reduced payment for that month. This can only happen if they are notified well in advance and if the Debt Counsellor has time to try reach out to them.

Speak to your Debt Counsellor as soon as you see something change with your income.

If you have a sudden added expense that you were not planning on and have not been saving a little as per your budget with the Debt Counsellor you might in a panic make a decision to spend money that should go towards your debt. After all you need clean clothes, you need to have a shower, you need to be able to get to work.

A short chat with your Debt Counsellor however may help you figure out how much it will cost to use a laundromat this month while you save towards a new washing machine. They may help you realise that your friend has a washing machine or your relatives do that you might use so long. You may be able to get a lift to work with a college or use public transport for a few weeks while the Debt Counsellor speaks to the vehicle finance credit provider about making a reduced payment for a little while to help cover the repairs. You will never know unless you speak to your Debt Counsellor.

Speak to your Debt Counsellor if you face a sudden unplanned expense.

Rather than miss out on the chance to defend your self legally if your credit providers send letters to your old address and rather than miss on on important emails and SMS it is good to update your Debt Counsellor if your contact info changes. They will advise you on who to let know about this change in address. They will remind you to let the credit providers know about the change. They may remind you to update your insurance provider or Payment Distribution Agent about the change so that you don’t have problems later.

Speak to your Debt Counsellor if your Contact info changes.

Speak to Your Debt Counsellor Sooner Rather than Later

Simply reaching out to the person who you are paying to help you each month will help you avoid some of the biggest challenges that can arise in debt review. This can mean that the entire Debt Counselling team at their office can work on your problem.

‘they can bring years of experience and good decision making to the table and help you see what all your options are’

While the Debt Counsellor is not able to just wave their wand and make the problems disappear but they can bring years of experience and good decision making to the table and help you see what all your options are. They can give you sound advice to help you protect your assets and to help you stay in the debt review process even when the unexpected comes along.

The sooner you reach out to them the more time you give them to help you find the best solution for your challenging situation.