February has been dubbed the month of love as we prepare to dazzle our Valentine’s day dates. However, it is important for consumers to be vigilant with their finances as we are greeted with another fuel increase this month. South African consumers will have to incorporate a 29c/l and 21c/l increase in petrol and diesel, respectively, into their budgets.
28 November 2012
Annual reviews of client’s circumstances and ability to afford rehabilitation amounts showed a sharp drop over the months leading to April 2010 for the average South African consumer under Debt Review. Under the NCA Debt Counsellors must perform an annual review of their clients budgets.
Luke Hirst, MD of debt experts DebtBusters says ‘We have seen an enormous decline in our client’s ability to increase their rehabilitation amounts to their creditors. From 86% of clients being able to increase their rehab amount by at least 4% per annum in September 09 to just below 60% to date, this is over a 20% decrease, showing that the situation is not improving. ‘
‘This downward trend comes as no surprise in our current economic climate and can be attributed to an increase in expenses far outweighing income. ‘
According to a source at the National Credit Regulator (NCR) the number of applications for debt counselling as at end of March 2010 was 161 749. This is an astonishing increase of 18 151 applications for Debt Counselling in just two months.
With electricity prices soaring by 24.8% this year, times are tough for consumers. While most clients under review are more than willing to pay a higher rehab amount to their creditors each month in order to get out of debt quicker, it is evident that for some this proves impossible.
Hirst continues, ‘This loss is felt by both the consumer and the banks.’