Economic devastation sees rapid rise in debt counselling

By Joshua White

With the economic devastation wrought by Covid-19, and the joblessness that has resulted, financial constraints and the possibility of falling into debt are a grim reality.

Debt counselling is a viable solution in these circumstances, giving people the chance to navigate their way out of debt. A recent survey conducted by leading debt counselling company DebtBusters indicates that consumers are increasingly turning to this solution.

READ MORE: 10 Questions you should ask your debt counsellor

An increase in inquiries

Benay Sager, head of DebtBusters, states, “Debt counselling inquiries are definitely growing, as more consumers are seeking help with their debt.”

This information is reflected in DebtBusters’ Debt Index for the second quarter of 2021. Sager explains, “In Q2 2021, there was increased demand from consumers for debt counselling, with inquiries up 18% compared to the same period last year.”

If you’re seeking a personal loan to consolidate your debt, you can apply here.

Why the increase?

The repercussions of nationwide lockdowns, and consumers’ inability to borrow money are the critical factors driving this trend, Sager says.

He notes further, “It is clear that the debt situation of SA consumers has further deteriorated recently. In the absence of a meaningful increase in real income growth, SA consumers continue to supplement their income with more unsecured credit.”

“Average loan size has increased, and the number of debt obligations, or open accounts, has decreased. These findings indicate that consumers are seeking help.”

Is there positive news?

DebtBusters’ Debt Index tracks client trends quarter-on-quarter. In the Q2 2021 Index, Sager notes, “The number of clients completing debt counselling successfully has increased sevenfold over the last five years.”

“Consumers who successfully completed debt counselling in Q2 2021 paid back R320m worth of debt to their creditors as part of the debt counselling process.”

Struggling with debt? Apply for debt consolidation today. Click here for more information.

Recent Articles

Featured How can debt counselling keep creditors away?

Among the many benefits of debt counselling is its ability to keep creditors from hounding you, leaving you with some measure of peace while you figure out how to repay your debt.

What are debt collectors not allowed to do?

Debt - if not managed - can seem like a dark cloud looming. But, you do have rights.

Should you authorize a minor on your credit card?

If you have children who need to move around independently, it may be practical to authorize them as users on your credit card. However, is this the right thing to do?


Wednesday Burger Nights at The Vineyard

Price: R190
When: Wednesdays
Where: Cape Town

Sanctuary Touch Monthly Special at Sanctuary Spa

Price: R490
When: Mondays to Sundays
Where: Cape Town

Blowdry Packages at Oayssis Hair and Beauty Bar

Price: R850 to R1800
When: Anytime
Where: Cape Town

Latest Guide

Guide to debt rehabilitation solutions