Stats SA announced that the unemployment rate in South Africa has declined by 1.4% to 25% between the first and second quarters of 2015.
But, the unemployment rate is still high. Living expenses increase. The economy isn’t looking promising. More mines are threatening to close down. The average South African isn’t earning enough to make necessary monthly debt repayments.
It’s, therefore, no surprise that we are frequently asked about debt and unemployment on our website and social media. Many people who lose their jobs are uncertain of what will happen to their debt, scared that they’ll lose everything.
What to do when you’re retrenched
Immediately send a letter of confirmation of retrenchment (written by your employer) to the bank or credit provider to arrange an alternative repayment schedule. Pay your credit providers as much as you can afford while looking for employment.
If you receive a summons
A summons will only be served to you after a few months. If you receive a summons stay calm. This is your opportunity to state your case and it’s therefore vital that you don’t miss the court appearance. When in court, you can explain the situation and ask the court to give you three to five months’ breathing space to find a job. A credit provider can’t repossess any assets without a court order.
Important: Keep a written record of all correspondence with the bank and sheriff to convince the judge at the court that you have been trying to get out of debt or tried to arrange something.
When you find employment
As soon as you’re employed again consider debt review to help you take control of your budget. The DebtSafe team can assist you by completing a free financial and debt assessments. This will help you identify your best option going forward.
Being proactive
Try to save as much money as possible every month. The ideal situation is to have enough money saved to get you through at least four months when you don’t have an income.
Start taking control of your finance today. If you know what your financial situation looks like, you’ll be able to see how much money you can save for a rainy day. Try to make the necessary changes now to prepare for what could happen.