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