logo

 What is over-indebtedness?

Next Post 
By Real People at 21 Dec 2017, 11:51 AM

 

According to the National Credit Regulator (NCR), as of March 2014, 77.18 million records of credit-active consumers are held by credit bureaus. 33.9% of those accounts are regarded as “impaired accounts”, which are accounts that are in arrears and/or have been handed over to the court. These statistics show signs that consumers are still struggling with over-indebtedness.

What is over-indebtedness?

  • Over-indebtedness occurs when a consumer or household is unable to meet their financial responsibilities or pay their accounts on time according to their credit agreements
  • There are various reasons that cause this
    • Spending more money than they earn
    • Skipping payments to creditors
  • When the debt increases with added interest charges, the consumer is financially strained, over-indebted and unable to pay back their debt

What are the signs of over-indebtedness?

  • Applying for a new loan in order to pay for other loans
  • Borrowing money in order to pay debt or cover expenses
  • Paying specific accounts and leaving the rest in arrears
  • Unable to meet monthly financial responsibilities
  • Having judgements against your name
  • Being issued summons by creditors and/or lawyers
  • Considering committing suicide
  • Considering being  placed under debt review
  • Allocating most of your income to repay debt
  • Constantly receiving sms notifications and/or phone calls by debt collectors for accounts that are overdue

 

If any of the above signs apply to you, immediately seek debt counselling and/or financial management assistance.  You may contact the following institutions for assistance:

  • National Credit Regulator – 0860 627 627
  • Credit Ombudsman – 0861 662 837
  • Council for Debt Collectors – 012 804 9808 / 8483 / 3402

 

Sources: NCR | Denovo Debt Solutions