debt repayment problems
10 June 2008

As South Africa braces itself for a possible wallet-busting two percent increase in interest rates this week, research by www.justmoney.co.za reveals that 25 percent of people would skip a payment if they could not afford their monthly debt repayments.

However, Justmoney says that missing a debt repayment is usually a clear sign that consumers become over-indebted, and warns that if South Africans "bury their heads in the sand" and hope they can pay their bills later, they might end up losing their homes, their cars and all of their valuable items.

Paul Beadle, managing director of the company, explains: "When people skip a payment they think they will catch up the following month, but by then the amount they owe is twice as much. It's a slippery slope towards bankruptcy, so South African's must tackle their over-indebtedness and talk to their bank or credit provider as soon as they see a repayment problem.

"What is also worrying is that more than one in ten of the people surveyed said that if they could not afford their debt repayments, they would try and borrow more money to make the payment. That's just compounding the problem, adding more debt on top of existing debt," concludes Beadle.

I-Net Bridge,  http://business.iafrica.com