In some cases a consumer may not be over-indebted but is experiencing or is likely to experience difficulty in keeping account payments up to date. It could be due to a major unforseen or unbudgeted expense, a reduction in salary, a reduction in working hours for hourly paid workers, a reduction or suspension of overtime, retrenchment, or any other unforeseen circumstances.
It is normally good practice to contact the credit providers directly with the intent to arrange alternative payment methods. Other options are also available: the consumer may approach an alternative dispute resolution agent (ADRA) or a debt counsellor for assistance. The ADRA will assist and mediate on your behalf with credit providers and the debt counsellor will assist by negotiating alternative repayment proposals on a voluntary basis.
The NDMA has assisted many consumers with preparing a reasonable budget which is then presented to creditors to request a temporary reduction in monthly installments until the consumer’s situation improves. Many creditors are willing to provide temporary relief and will not proceed with legal action as long as the consumer pays according to the new arrangement.
It is important not to agree to an installment without first doing a proper budget because if you default on the new arrangement the trust between you and your creditor is broken and it then becomes difficult to make alternative arrangments if your circumstances become worse.