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Debtbusters raise awareness about debt verification
It is not uncommon for debt counseling firms or corporations to promote themselves to get customers. Debtbusters, however, are debt counseling practice We’re working hard this month to get people talking about debt and getting the press to cover the issue. They don’t focus so much on themselves as they provide information based on their clients’ experiences with debt for discussion about debt and debt review.
Debtbuster have a good reputation for providing lenders that N.national C.returns R.egulator and the media with quarterly statistics on what happens to the debt levels of those entering the debt review. As a debt counseling practice with most clients, they have a decent pool of statistics to pull off. While these statistics come from a single source, they help paint a picture of what is happening across the debt counseling industry.
Presentation of the facts
In a recent online presentation, they shared some statistics on how consumer debt (who enter the debt review) has changed over the past 4 years.
Here is some of the key information that was shared during the presentation:
In the past 4 years because salaries have not increased proportionally and inflation has increased rapidly, In fact, consumers now have 20% less purchasing power than in 2016. This has resulted in an increasing number of people relying on credit to fill this growing gap between needs and income.
While a “normal” income-to-debt ratio, which is likely to be manageable, uses + – 40% of your income to cover debts, the current average you see among consumers is people Use 61% of their income to pay off their debts. This leaves them with too little money for essentials and then falls into the trap of using more and more credit to keep up.
Also, the size of the unsecured loan that people are asking for (and getting) is now larger than ever. The banks and lenders are issuing ever larger loans and credit facilities. Debtbusters say their new clients have a lot more unsecured debt. Unsecured loan amounts in particular are typically 48% larger (value) today than they were 4 years ago.
Those earning R5000 or less are (over) committed to repaying 83% of their income on debt each month. The type of loans they rely on the most are unsecured loans. This is obviously unrealistic and it’s no wonder they ask for help.
People need help
The statistics show that too People reach out for help earlier than before. While it’s a very good thing (and it’s good to ask for help sooner rather than later), it turns out that consumers are now getting into trouble but cannot cope with only a few credit accounts on their own. Historically, consumers who stepped into the debt review had an average of 9 different lenders to whom they owe money. Now consumers only owe 6 money to lenders, but the amount they owe is the same or greater than it was before.
An increase of 40% over the usual January applications [for debt review]’
In January 2021, the number of people asking for help increased steadily. They report an increase of 40% over the usual January applications (which is usually a pretty quiet month in the debt review) and say February has been even busier so far.
When you need help
If you are suffering from debt stress, don’t wait for help. Talk to a professional NCR registered debt counselor about your situation.
If you are suffering from debt stress, don’t wait for help
February is usually a month when many people finally make a final decision to take control of their runaway finances, and it’s a great month to get into the debt verification process (if this is the right solution for you ). Talk to a debt counselor about how you can better manage your debt this year.
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