Battered by unemployment and salary cuts in 2020, millions of South African households entered the new year struggling to get by. Some are not even able keep up with their children’s school fees, let alone repay their debts.
As early as in the second quarter of 2020, the number of consumers’ accounts that were one or two months in arrears had started rise, according to the National Credit Regulator’s Credit Bureau Monitor. While the regulator has not published data beyond this period, credit bureaus who track these developments faster have been sounding the alarm.
TransUnion reported that delinquencies increased across all credit products in the third quarter of 2020 and DebtBusters has seen a 40% increase in consumers making debt-counselling enquiries this January.
Not everyone who has enquired about debt counselling has signed up for it. Understandably so. It can be a complicated process and its pros and cons are well documented.
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