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Consumer Affairs
Wednesday, February 20, 2013 - 15:40
Saving borrowers

DebtSafe says it has been responsible for the restructuring of debt in excess of a staggering R313 million in the period January – October 2012, illustrating the serious struggles faced by the consumer against unscrupulous lenders.
“We were able to negotiate agreements with relevant creditors for individual clients and save them on average some 57% of their monthly income,” explains Hein Du Plessis, Managing Director of DebtSafe. This is a 3% increase from the average saving of the previous year. According to the findings, before the consumer enters the review process with DebtSafe, an average commitment of R 10 089.34 is obligatory towards cumulative debt. DebtSafe is able to reduce this instalment to an average of only R 4 313.71 per month, a reduction that alleviates immense internal and external pressure on a household.
The statistics further show that, prior to debt review, an average term of repayment towards creditors initially amounts to 78 months. Once a consumer has entered into debt review, DebtSafe is able to extend this period by 29 months to 107 months resulting in reduced repayments with an extension of an average 37%. One of the alarming findings extracted from the statistics is the number of consumers entering the debt review process between the ages of 20 – 30 years as opposed to the same statistics in 2009. According to Du Plessis this is because creditors are making it easier for younger consumers to access credit. “You no longer need as many prerequisites to get a credit card as you did 10 years ago”. Young adults might not have the knowledge or experience to deal with the responsibility of credit.
In terms of race, the DebtSafe consumer base has doubled within the coloured community, yet black and white still constitute the majority. Du Plessis warns consumers against the allure of unsecured debt. If it is not an asset such as a home loan, then a consumer should strongly reconsider whether the risk is worth the reward at the end of the day. Loans are often very expensive and the funds are used for unnecessary and, more often than not, luxury items. “Unsecured loans only postpone the effects of over-indebtedness and consumers should deal with these issues head on, rather than borrowing to survive and creating a ‘ticking time bomb’ of ‘snowballing debt’. If a household has a shortfall of money each month, it should investigate and find an immediate solution.
DebtSafe believes in new beginnings and continuously aims to negotiate settlements that are acceptable to both debtors and creditors. DebtSafe has introduced a Six Step Solution and throughout the process a consumer is guided towards a future of personal growth and financial stability. DebtSafe offices are based countrywide and aim to provide the best possible result for each individual. For more information or to sign up for debt review please visit DebtSafe at: www.debtsafe.co.za

Copyright © Insurance Times and Investments® Vol:26.1 1st January, 2013
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