I am in the IT industry and a qualified technician.
I was retrenched a few years ago and was unable to pay all of my accounts; this caused interest to build up which caused it to be a ridiculous amount to pay back now.
And I have been unable to get a permanent position since then because of my credit status.
Friedl Kreuser of 6cents, a division of Summit Financial Partners, responds:
Firstly, as a preventative measure for other readers facing retrenchment, most debt instalments these days include a contribution to Credit Life Insurance.
This is a very lucrative industry for many lenders, despite the low premiums, as very few consumers know that they can cash in on their (likely numerous) Credit Life Policies in case of retrenchment or death.
The payout from Credit Life policies (the amount will depend on the specific policy) can help retrenched employees pay their debt while they are looking for a new job.
For this specific reader, there are two main ways to improve a poor credit record:
- In case of a bad payment record, the only way to improve this is to get your accounts back up to date; those with the highest interest rates should be targeted first.
The reader mentions that the repayments have become ridiculous.
If he is unable to keep up with all his debts, he should contact his credit providers to make arrangements for reduced payments (get any arrangements in writing on an official letterhead) or alternatively contact a good debt counsellor for assistance.
- In case of judgments by credit providers, these debts must first be paid up, but to remove the judgment, the consumer must additionally get a Rescission Consent Letter from the relevant credit provider and apply to the court that passed the judgment (which should be the consumer's local court at the time of judgment) to have the judgment rescinded.
As this usually means involving an attorney, consumers should shop around to make sure they do not pay excessive attorneys' costs. It is not a complicated procedure, so there is no need to pay an arm and a leg.
Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.
Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.
Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.