MONEY CLINIC | I can’t afford to repay my debts due to Covid-19. Can I get a discount?

by Allison Jeftha

A Fin24 reader who lost his job during the Covid-19 pandemic cannot repay his debts. Asking if it is possible to get a discount on the outstanding amount, he writes: 

I’m in the tourism sector in South Africa. I’ve lost all means of income because of the Covid-19 pandemic.

I have two credit cards, which I’ve handed over for debt collection. 

I don’t have any income and can’t pay them off. I have made arrangements to pay a small amount every month.

Is there any way to get a substantial discount on these debts to settle the outstanding amounts?

Neil Roets, CEO of Debt Rescue responds: 

The impact of Covid-19 on the economy has been far-reaching. And certain sectors have been very hard hit, such as the tourism industry.

When it comes to repaying the credit agreements, transparency with the credit providers will go a long way. The first place to start is to confirm with the credit provider if there is any credit life insurance on the accounts, to see if there might be any cover for the current situation.

If you are looking at settling the accounts, the best would be to speak to them to explain the current situation and ask them if they would consider settlement discounts. All of such is at their discretion, and if they were to consider it, it would be within any guidelines they might have, but it is definitely worth asking. 

Questions may be edited for brevity and clarity.

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