DebtSafe Blog

Now is NOT the Time to Be a Non-Paying Consumer

The world has sure been hit hard by Covid-19, mostly known as the Coronavirus. And, panic, frustration, and uncertainty are also evident in the heartbeat of Africa. President Ramaphosa has instructed South Africans to go into a 21-day lockdown period from 26 March, starting at midnight. And, in between all the havoc, consumers are still out and about panic buying and making impulsive decisions when it comes to credit and debt. NOW is NOT the time to think that creditors and banks will give all consumers a payment holiday just because of a ‘country lockdown’. Even more so for consumers that are registered under Debt Review. One cannot afford to be a non-paying consumer or a non-payer of debt amid this crisis – period (a bit hard for some, but the truth).

Current Debt Review clients have to note that NO payment holiday applies to the Debt Review process as it is governed by a Court Order.  South Africans have to stick to their monthly budgets, they should not overextend themselves and continue to honour their debt repayments. She says there have been several relief measure announcements made by different banks recently BUT for their customers within certain conditions (like accounts/agreements being in good standing, for example). Do note that consumers who might qualify will have to incur interest on these accounts in the long term.

Consumers have to make sure that they do not make assumptions about payment holidays where there are none. Consumers have to continue to stay up to date with communications and contact their relevant Debt Counsellors (if the consumer is registered under Debt Review), banks or creditors to avoid any confusion or questions that they might have.

South Africans have to take a step back when it comes to their current financial situations and decisions. Financial problems are not going to disappear. And, consumers have to keep the following tips in mind, especially during South Africa’s lockdown period:

  • South Africans have to honour President Ramaphosa’s recent recommendations and guidelines, including staying calm and focusing on the task at hand.
  • Consumers have to manage, therefore, what they can ‘control’, like their finances, keep up with payments or debt obligations. And, continually stay in contact with their creditors and banks. Due to the lockdown period, consumers have to make sure what the best channel for communication is with their providers, for example: to use email and not a phone line, since various companies’ employees may be working remotely/from home during this time.  
  • If consumers see that they have tried to negotiate with creditors and have, unfortunately, been unsuccessful and are going to fall (or have fallen) behind with payments, they have to take the National Credit Regulator’s (NCR) recommended programme into consideration to FIX DEBT. Referring to the Debt Review process. If individuals have tried everything, and they currently receive a form of income, they can ask for an assessment to see if they will qualify for Debt Review.
  • If Debt Review is an option for consumers, they can take a sigh of relief and know that the Debt Counsellor will negotiate with creditors on their behalf, lessen their monthly debt payments to one affordable payment amount and fight off harassment calls. Plus, protect their assets, like a house or car, in the process.
  • If, however, consumers are in a panic due to income-related matters during this time, non-Debt Review clients/consumers should be proactive and get into contact with their financial advisors/planners, lawyers, Human Resource Department or other relevant professionals that will be able to assist. Current Debt Review clients have to honour the Debt Review process as it is subject to a Court and stay up to date with their monthly Debt Review repayments. Debt Review clients can contact their Debt Counsellors directly if they have any concerns.  

NOW is NOT the time for a consumer to be an ostrich and avoid communication with creditors. South African consumers have to continue to honour or service their debt obligations even if the country is in lockdown for a couple of weeks. And, they have to be proactive when it comes to concerns or uncertainties relating to payments and other important matters. Keep calm South Africans and stay hands-on with those financials.