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What happens if you are retrenched while you're under debt review?

South Africans are facing very trying economic times. At Libertine Consultants, we understand the pressures of mounting debt and the fear that you may not even be able to make the basic consolidated repayment brokered by a debt counsellor. In fact, that is one of the questions we hear most frequently during our initial meetings with debt-stricken clients: What should happen if I lose my job while I’m under debt review?

The short answer is not a happy one - debt counselling is only an option when you have a regular income, and if you should lose that income during the review process, your creditors can terminate the review in terms of the National Credit Act. However, don’t lose heart, there are options available to debt review clients who lose their regular income.

date: 26/04/2017Author:

What is the first thing you should do?

The most important thing to remember is to get in touch with your debt counsellor immediately once you get the news. For many of us, our first instinct would be to sweep this devastating news under the rug until we can devise a plan to remedy the situation. In the case of debt review, this is not an option. You need to notify your counsellor immediately so they have time to approach your creditors and the court on your behalf.

How can your debt counsellor help you?

In some cases, the credit life protection or your insurance for your debt, which should form part of the funds set aside in your essential living expenses, could be applicable. Your debt counsellor will be able to help you activate this insurance. Also, if a debt review court order has not been granted, your counsellor may make use of one of the remedies set out in the National Credit Act to postpone payments under debt review to allow you to a) obtain alternative employment or b) to reduce the monthly repayments to accommodate your altered financial situation.

For more information on debt review and your options in the case of retrenchment or termination at work, get in touch with a Libertine Consultants representative. Every case is different, and it’s best to schedule a one-on-one chat so we can determine how to help you. We’re here to assist you every step of the way to a new, debt-free future.

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