Getting retrenched? Don?t panic, there is help

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More than 100 000 jobs were quietly shed before last year ended and the retrenchment barometer will go much higher this year with economists predicting a three percent rise in joblessness.

"South Africa already has an excessively high unemployment rate and just over half of all South Africans living in poverty according to the Human Sciences Research Council. We can?t afford more job losses,' Andre Snyman, CEO of debt counseling umbrella organisation Consumer Assist said.

"But many more people will lose work this year as the global financial crisis bites. There are ways to manage retrenchment without incurring more debt.'

Sketching the growing unemployment crisis Snyman noted that Statistics South Africa revealed that more than 70 000 jobs were lost to September last year and retrenchments accelerated as the year ended. The mining industry shed close to 50 000 jobs. "The building industry is laying off workers, as developers battle to get bank loans. And construction of low-cost housing has declined by 70%,' Snyman pointed out.

Rand Merchant Bank retrenched high-earning investment bankers, Absa is cutting 1 210 jobs, Standard Bank has frozen posts and Nedbank will reduce staff by 80. The clothing and textile industry shed 5 000 jobs with 20 companies closing.

More than 1 000 car dealerships have closed and General Motors and Ford have retrenched close to 3 000 workers. The Volkswagen plant in Uitenhage has had short-time for a year. Manufacturing production fell 6.9% in the third quarter of 2008, according to StatsSA. "Manufacturing is the second biggest contributor to GDP and employment in South Africa,' Snyman said "and any reduction in manufacturing production damages exports, sees jobs lost and puts a drag on the economy.'

James Seele, media liaison officer for Consumer Assist said, "There are warning signs before retrenchment, overtime is cut, there are lots of notices about the need to cut costs.' Oprah Winfrey?s money guru Suzi Orman says every person should have the equivalent of eight months of their salary in savings, "because that is how long it takes on average to get a new job.' In the United States a million jobs were lost in November and December.

What should you do if you are retrenched?

Consumer Assist debt counsellors all advise: "Don?t panic!

· Immediately tell your creditors and ask for a relief period, most will give three to six months where you don?t have to pay.

· Debt counsellor Johan Zurich points out that loans through banks, such as your bond and many insurance policies carry a three month "breather' clause where you don?t have to pay for those months while you seek work.

· Debt counsellor Ulande Janse van Rensburg, who works in the Vaal Triangle which has been hard hit by job losses, says it is important that you "keep creditors who give you relief informed. Ask those who turn down your job applications to give a letter saying why and show it to your creditors. It is important that they know you are trying to get work. An honest relationship works in your favour.

· "As soon as you get a job let creditors know and negotiate a lower rate of repayment. If you don?t know how to do this a debt counsellor can help for a small fee. Even if you can pay only R50 a month, try and pay something off, it shows a willingness to eliminate debt.'

· Go to a debt counsellor for help.

· Apply for unemployment insurance if you qualify.

· Don?t take out new loans or credit.

· Don?t cancel insurance, you can do without medical aid because there are public hospitals but don?t cancel car or household insurance.

· If you get a retrenchment package first pay off debt, then invest in a high-yield savings plan so you can draw money if you need to while your money earns interest.

· Keep all documents between you and creditors, don?t speak to them over the phone or post letters, email or fax them so you have proof. If you do speak to someone in person, note down his or her full name and job title, the date and time on which you spoke to them and what was said.

· Learn a new skill in an area where jobs are needed, for example, although there is high unemployment in SA there are also massive skills shortages in areas like teaching, nursing, pharmaceutical work, engineering, technical skills and information technology.

· Do odd jobs, part time or consulting work.

· Cut out unnecessary expenditure especially cigarettes and alcohol.

· Van Rensburg said she had three clients who got divorced so they could access the man?s pension package half of which a divorced wife is entitled to - "it?s a terrible idea, it will damage the marriage and your later retirement plans,' she counselled.

Seele said, "retrenchment it is not the end of the world, value yourself, don?t allow age or a lack of confidence to limit your ability to be productive. If you are an older person many people will pay for your years of experience by using you as a consultant or to help in their business. Investigate ways to developing different skills.'

Snyman said families should share ideas on how to cope: "South African debtors are struggling to pay more than R950-billion, according to the National Credit Regulator. It?s easy to get into very serious debt and hard to get out".

"We have a 24 hour call centre 0861 21 22 23 that works every day of the year helping those in debt and an interactive website www.consumerassist.co.za with a debt calculator. Don?t wait before you seek help.'

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