FINANCE
debt into a manageable repayment plan . While under debt review , clients are protected from legal action and harassment from creditors , but they cannot apply for new credit until the debt is cleared .
5 . Debt Counselling : A debt councillor negotiates with creditors on the client ' s behalf , proposing a new payment plan with reduced monthly instalments and interest rates .
6 . Credit Life Insurance : Credit life insurance covers debt repayments in the event of death , disability , illness , or retrenchment . Homeowners can claim from insurance if they are unable to pay bond repayments due to any of these reasons .
Financial institutions in South Africa are aware of the challenges faced by distressed bondholders . Many banks offer specific programmes or solutions , such as dedicated debt care centres , home loan payment relief centres , bank-assisted sales programmes for properties , and debt review and debt counselling services .
Goosen advises homeowners to carefully consider all available options and plan for the worstcase scenario . He emphasizes the importance of taking out necessary insurance , mindful spending , and seeking consultation with professionals when purchasing a home .
“ In these difficult economic times , financial institutions play a crucial role in providing support and relief to clients facing bond repayment challenges . Offering financial assistance over an extended period can help homeowners maintain their good standing and avoid adverse credit scores , benefiting all parties involved ,” concludes Goosen .
53 AUG / SEPT 2023 SA Real Estate Investor Magazine