Business & Economy

Monday, 27 April 2009 19:29

Man saves R1,2m using debt counselling & cuts 92 months off repayments

 
{pp}Imagine cutting R1,2m off your debt? Andre Snyman, managing director of Consumer Assist one of South Africa’s largest debt counselling organisations had a client who “was over-indebted and owed R3 004 985, including his bond. He was paying off R24 400 a month but the interest over the 240 months of the debt was going to amount to R2 783 466 alone. In other words over 20 years, he would pay out R5 788 451.

“The debt counsellor restructured his debt after negotiations with creditors. His monthly payment has dropped to R16 890 a month, which means total interest will come down to R1 544 233 and the debt will be reduced to R2 862 133 – including the debt counselling fees. “Simply put, debt counselling means he will remove 92 months off his repayments, eliminate R142 852 debt, reduce monthly payments by R7 600 and the biggest saving will come in the R1 239 243 cut from interest rates – enough to buy a really nice second property. And after this process he will have a clean credit record.”

The most recent figures released by StatsSA show that there was a year-on-year increase in civil summonses served for debt. It showed that banks and financial institutions were fiercely pursuing those who owed them money with civil judgements relating to money lent, whereas retailers were less aggressive with only R61,6m or 11,3% of all debt judgements. Debt counselling in terms of the National Credit Act has given new hope to consumers who in the past were given easy credit and then dealt with aggressively by the same easy lenders when the consumers failed to pay. Debt counsellors have to all be accredited by the National Credit Regulator and may only charge fees laid down in terms of the Act. The fees charged by debt counsellors who are often accountants, bookkeepers, former insurance brokers or experts from the financial industry, are low and are added to the debt so the consumer does not face additional costs once he or she has liquidated his or her debt.

Since launching their website with an interactive debt calculator on it www.consumerassist.co.za less than a month ago and a call centre 0861 21 22 23, Snyman says they are seeing increasingly high traffic to the site and the call centre. “When the National Credit Act came into effect we initially had an average of around 10 applications a day for debt counselling, that rose to about 60 a day in June and presently we are receiving an average of 190 applications a day now. “We are also receiving increasing numbers of requests from companies to ensure that their staff knows how to manage money better to avoid fraud, high absenteeism and low productivity.” Classic signs of staff members who are in financial trouble:

  • Consistently asking for advances on their salary
  • Miss work toward the end of the money because they cannot afford bus or taxi fare or petrol
  • Accident prone or lots of mistakes because so they constantly worrying
  • Persistently ill – common symptoms include headaches, ulcers, irritable, insomnia, migraines, depression, muscle spasms especially lower back pain and heart problems.

Snyman advises businesses to be sensitive to employees showing signs of debt stress and to ensure they go for financial help including debt counselling. “Working in this industry is very disturbing because we realise that not everyone in serious debt has overspent, rapid rises in interest rates have outpaced salary increases and if a breadwinner becomes seriously ill or dies it can throw the family into financial crisis.” FOR FURTHER INFORMATION www.consumerassist.co.za 0861 21 22 23 debt counselling call centre Andre Snyman CEO Consumer Assist 082 449 6856 This email address is being protected from spambots. You need JavaScript enabled to view it. / 012 654 6018 (Languages: English, Afrikaans)

Contact information:
Charlene Smith
Communications
This email address is being protected from spambots. You need JavaScript enabled to view it.
011 646 7637
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