Website to help those deep in debt
18-AUG-08
A new website and call centre has been launched to help the more than 6m South Africans floundering in debt.
South Africa’s largest debt counselling organisation, Consumer Assist, which is launching the helpline 0860 21 22 23 and website with an interactive debt calculator
Www.Consumerassist.co.za says the most indebted people in South Africa are aged 25 to 35 and earn between R8 000 to R15 000 and on average it is going to take them anything from four to 12 years to get out of the debt hole excessive spending has put them in.
“It’s a very serious situation,” Andre Snyman, CEO of Consumer Assist – a National Credit Regulator approved helpline and debt counsellor umbrella service says. It is the largest organisation of its kind in South Africa.
“These are often young, talented people; the cream of South Africa’s future and they are finding all their dreams put on hold because they went through a mad year or a few months of acquiring credit cards, store accounts, a too-expensive car and a home exceeding their means".
“During that time they spent money like crazy buying what they couldn’t afford because low interest rates gave a false sense of wealth and then interest rates began going up, now they are in serious trouble.”
He says the Reserve Bank’s decision (Thursday, 14 August) not to raise interest rates is welcome.
“It gives consumer’s breathing space to pay off outstanding debt, but it would be very dangerous to assume that interest rates will not continue to rise. Last week the United States Federal Reserve said inflation in that country was running at the highest in more than 17 years, pushed by costlier energy and food".
“South Africa follows global trends, our food prices are continuing to rise and the rates and electricity hikes are going to make themselves felt on consumer budgets over the next few months.”
Snyman says that those who have been cautious with spending now find themselves in difficulty.
Take the real case of Megan and Bruce: they bought a modest townhouse two years ago in Cape Town, stopped their credit card and wisely froze their monthly bond repayment of R5 000pm, but now more than 10 interest rate hikes later and at the end of the fixed-term, their bank has informed them that as from September their bond repayments will rise to R9 000pm.
Their salaries haven’t gone up as fast and a few months ago Megan gave birth to their first child, “we’re facing serious difficulty,” Megan says.
But amid the gloom is great news: “If you use a Consumer Assist debt counsellor, it is possible to pay off your debt in a third of the time. You’ll probably still be able to keep the car or home – or scaled down versions and learn the sort of financial management tips that in future can lead to you acquiring wealth,” Snyman says.
If you apply for debt counselling your vehicle and home cannot be attached for 60 days in terms of the National Credit Act and this often gives consumers the breathing space they and the debt counsellor need to structure an appropriate debt repayment package.
“Consumer Assist uses software approved by the National Credit Regulator for use by approved debt counsellors. We employ more than half of all of South Africa’s approved debt counsellors under our umbrella to ensure those in debt have further protections and find it easier to rapidly get a debt counsellor near them.
“Perhaps the most important part of our free service to the public is that we have a highly interactive website www.consumerassist.co.za with a debt calculator where within a few minutes you can calculate your debt situation and see whether or not you need to use a debt counsellor.
“We’ve found some who have used the calculator and are not in debt have realised they could be saving or investing more money and growing their wealth – it’s a very useful tool and none of the information is kept on the site, so it is completely secure and private.”
If, however, the debt calculator shows what you already suspect, that you are in serious financial trouble, the website can direct you to a debt counsellor close to you.
There is also a 24-hour call centre 0861 21 22 23 which operates 365 days of the year where basic questions can be answered and too, where agents can help direct you to a debt counsellor.
The technology in the process is so sophisticated (and yet easy to use) that some of the most successful cases have been managed at long distance by phone or email. “One of our cases was a very seriously indebted woman in Cape Town who stood to lose everything; we put her in touch with a debt counsellor in Vanderbijlpark who helped structure a payment solution for her.”
Consumer Assist’s debt counsellors abide by the National Credit Act guidelines. They contact all
creditors (companies or individuals the debtor owes money to) so that they delay action against the debtor.Then the counsellor, with the aid of the software helps advise the debtor on how to structure their payments so they pay debts off faster – while being able to maintain an acceptable lifestyle.
Debts that might have taken the consumer five years to pay off, can be cleared within three years and the debtor starts off their life again, debt free, with a clean credit record and the sort of money management knowledge that ensures they don’t get into trouble again and have learnt the techniques to make clever investments to build wealth.
As an example, once debts have been cleared, the former debtor now has extra money to plough into their bond and pay that off sooner with the massive savings that can mean.
“Those in debt come from across all South Africa sectors,” Consumer Assist media liaison officer, James Steele says, “they are labourers battling to buy enough food for their families, or corporate executives who earn R100 000 a month and have not managed their finances well and now risk losing everything".
"Our message is that sleepless nights don’t solve anything and it’s best to act promptly to begin eliminating debt through the safety the National Credit Act and an approved debt counsellor afford.”
· Visit www.consumerassist.co.za for more details
