Debt catching up with South Africans

By Staff Writer

Annual reviews of client's circumstances and ability to afford rehabilitation amounts showed a sharp drop over the months leading to April 2010 for the average South African consumer under Debt Review. Under the NCA Debt Counsellors must perform an annual review of their clients budgets.

Luke Hirst, MD of debt experts Debtbusters says ‘We have seen an enormous decline in our client's ability to increase their rehabilitation amounts to their creditors. From 86% of clients being able to increase their rehab amount by at least 4% per annum in September 09 to just below 60% to date, this is over a 20% decrease, showing that the situation is not improving. ‘

‘This downward trend comes as no surprise in our current economic climate and can be attributed to an increase in expenses far outweighing income. ‘

According to a source at the National Credit Regulator (NCR) the number of applications for debt counselling as at end of March 2010 was 161 749. This is an astonishing increase of 18 151 applications for Debt Counselling in just two months.

With electricity prices soaring by 24.8% this year, times are tough for consumers. While most clients under review are more than willing to pay a higher rehab amount to their creditors each month in order to get out of debt quicker, it is evident that for some this proves impossible.

Hirst continues, ‘This loss is felt by both the consumer and the banks. The consumer who continues with the struggle to become debt free and the banks who do not receive the funds owed to them."


It's worrying time for South Africans who just can't seem to stay out of debt trouble. If you need help, visit the DebtBusters section on the Justmoney site.

Recent Articles

Featured Should you take out a loan or rent-to-own?

We compare personal loans to new finance models that are emerging, such as rent-to-own, which offers the same solution in a different format.

Why "insurance fronting" for your children is a bad idea

We examine the consequences of “insurance fronting” for your children and investigate legal ways to decrease your children’s premiums in South Africa.

Are you paying too much in bank fees?

We find out how you can bank with savvy, to best manage fees and charges.

What’s the minimum income for a car loan?

When you apply for vehicle finance, your lender will consider several factors when assessing your application, including your income.


Latest Guide

Guide to debt rehabilitation solutions