Debt Review when you are unemployed

Updated: a day ago

Negociate Credit Solutions - Author Lauren Heekes


While a consumer cannot apply for Debt Review if they are unemployed, there is a broader sense of what it means to be employed or unemployed. Here are some examples that can be considered by a Debt Counsellor when a consumer is applying for Debt Review.


Can I Apply for Debt Review if I am unemployed

Here are some exceptions:

1. Your spouse or family can pay your installment until you find employment again. The installment under Debt Review is a lot lower than what you are currently paying to Credit Providers and often a spouse or family are in a position to assist you.


2. You received retrenchment money and it is enough to pay your Debt Review installment until you can find employment again.


3. Your pension pay out is not enough to settle your debt,. However, there may be enough money to pay the Debt Review installment until you can find employment again.


4. You receive a rental income from property you own. This rental income is enough to pay your Debt Review installment each month while you look for employment.


5. You have an investment that you can cash out to pay your Debt Review installment until you can find employment again.


6. Your Debt Review installment is low enough that your side hustle job is earning you enough to pay the installment until you can find employment again.


7. You are a pensioner and receive a monthly income from a Pension Fund or Retirement Annuity. Technically the National Credit Act states that you should not be granted credit after 65. However let's say you were granted credit at 60 in the form of a vehicle or Revolving Credit Plan. A vehicle's term can be longer that 5 years and Revolving Credit Plans can have indefinite terms.


8. You have been medically boarded but receive a monthly income from your pension. Sometimes this income is not enough to cover your current contractual installments with your Credit Providers. Debt Review reduces installments and interests rates in such a way that you are able to afford to pay your Credit Providers.

Can't pay Debt Review installment due to unforeseen expenses

Already under Debt Review and lost your Job or have incurred unforeseen expenses?


If you are already under Debt Review you can also apply for what is called a Change of Circumstance (Form 17.3). This provides you with the opportunity to obtain a payment grace period from anywhere between 1-3 months. This is dependent though on how you have conducted your Debt Review repayments up until that point.


Examples

1. COVD-19 - Lockdown Level 4 and 5

Most Debt Review clients were offered a 3-month payment grace period during the Lock Down by their Credit Providers. The payments were not required to be brought up to date. The contract was simply extended by 3 months. Application for a “Change of Circumstance” based on the Lock Down had to be supported by documentation that proved loss of income.


2. Debt Review Clients are offered a 1-3 month grace period in events of retrenchment. Payments will have to be brought up to date after the grace period is completed. A new proposal is generated increasing the installment over the remaining period. This is required to accommodate the 3 months of non-payment. The new installment is not much higher than what was originally being paid. Small adjustments have to be made to the client’s budget to afford the higher installment. Application for a “Change of Circumstance” based on retrenchment must be supported by documentation that proves unemployment.


3. Debt Review Clients are offered a 1-month grace period where unforeseen expenses are concerned.

The Credit Provider will decide whether the missed payment must be brought up to date or not. Application for a “Change of Circumstance” based on unforeseen expenses must be supported by documentation that proves the expenditure.

Let a Debt Counellor Work our Your new Installment

So how do I know what my new installment is going to be?


Before starting Debt Review, a detailed financial assessment is conducted to determine the new reduced installment, interest rate and the extended term. This assessment will also include details of how the process will work. Once this assessment is completed, and if you are satisfied that you can pay the new lower installment, you can proceed with your application for Debt Review.


View our article on Debt Review Installment Examples below.


There is no quick fix to getting out of debt. Make sure that you partner with a Debt Counsellor that is going to support you through the Debt Review Process.


If you would like us to conduct a free financial assessment for you here are contact options:

1.Complete our online assessment form at http://bit.ly/39miXXx

2. Send us an email to contactme@negociate.co.za

3. Submit your query via our FaceBook Messenger app https://bit.ly/3i3PIwl

4. Complete a call back request on our website at http://bit.ly/38Aoyuc



A consultant will contact you to discuss the way forward. Please note that you are not obligated to proceed if you feel that the solution we offer you will not assist you enough financially.


If you find this article helpful, “Like” our FaceBook page and join our FaceBook Community. Send us a question in messenger and get some free advice on how to resolve any financial issues .


About our Author

Lauren is a registered member of the National Credit Regulator. Prior to that, she worked as a Financial and Technical consultant for McGregor-BFA (Now INET-BFA). McGregor-BFA provided Trading and Market related data as well as Investment management software to Asset Managers, University Business Schools and Investment entities. Thereafter experience was advanced to the Property Market working as a Project Manager for Propertyi. But it was her career at the IEB in Adult Education that inspired a passion of hers to educate consumers about responsible ways of managing their financial lives and the long term advantages of doing so. It is her belief that financial education should be taught from an early age. By doing so we can create a country that is economically stable, driven not only by work ethics, but by becoming Financially Independent too.

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