Gauteng Business News

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CONSUMER DEBT: Debtsafe Reduces Monthly Repayments for Clients By 54%


Recent Gauteng Business News

DebtSafe, a leading debt counselling institution today released statistics based on results taken from existing clients undergoing the debt restructuring process. The solution, proposed by DebtSafe who negotiate agreements with relevant creditors for individual clients, has proven to save clients on average 54% of their monthly income.

Based on an average gross income of R15, 121.00 per month, and with deductions totalling approximately R 3 455.00 of this amount, clients were left with a nett income of R11, 665.00. Of this figure R11, 665.00 figure, a massive R10, 365.00 was used to repay monthly instalments which amounts to 89% of the total Nett income. After the DebtSafe Six Step Solution, clients now spend only R4, 055.00 on average on debt repayments – only 35% of their Nett income. The remaining funds help facilitate other essential monthly expenditures like food, household items, medical aid and other necessary expenses.

Debtsafe and the Duplum Rule

Hein du Plessis, Managing Director of DebtSafe said of the results, “Although one would expect that consumers would have to pay more to creditors over a longer period of time, this is not always the case. DebtSafe has discovered that clients actually end up paying less and are often out of debt sooner. “This is due to the in duplum rule of the National Credit Act (Section 103 (5)) which limits the amount of interest and fees a consumer under review will pay” – Du Plessis continued, “Over 41% of our clients are in possession of a court order which officially rearranges their debt – although the remaining percentage are still in the process, orders are granted daily in over 300 Magistrate’s Courts in SA.”

Stephen Logan, Director of Logan Attorneys, who specialise in improving clients' credit records so that they can obtain credit and pay less interest, says of DebtSafe’s results, “It is great to see that DebtSafe is able to reduce their clients’ average monthly debt repayments from 89% to 35% of their Nett income. These must be some of the best statistics in the country. More importantly, this improved cash flow is exactly what debt counselling was designed to achieve. Debt-strapped consumers will welcome the news that there are debt counsellors who have figured out how to overcome the challenges and make debt counselling work.”

Debtsafe Proves Trained Debt Counsellors Provide the Answer

Of the effect these statistics could have on the entire debt restructuring industry, Logan says that, “While there was much concern after the recent high court judgments, which gave creditors more leeway, DebtSafe is proving that committed and properly trained debt counsellors and their consumers can surmount these challenges. Moreover, the fact that DebtSafe are obtaining so many court orders is further proof that the courts are now supporting the debt counselling process.”

Chief economist and DebtSafe Project Manager adds that, “after a number of years of turmoil in the industry, which was overshadowed by negativity from both consumers and creditors, it is heart-warming to see that this company has not given up. They have proceeded to place their clients, the consumers, first and now many families can face the future with dignity and respect, not fearing prosecution from creditors. They are repaying their debt and are firmly on their way to reclaim their position in society.”

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