For the past few years businesses and individuals in South Africa have experienced significant financial strain due to economic factors such as rising repo rates, yo-yoing petrol prices, load shedding and interest rates hikes.  In the light of these challenges many people are facing difficulties in meeting their financial obligations and are struggling with regards to safeguarding their financial well-being.   In response to this situation, MD of Gillan & Veldhuizen Inc., PJ Veldhuizen shares some valuable insights on navigating these challenging times.

In this demanding economic environment, pro-active measures are a must for heading off potential losses. “When you see you are about to start defaulting, don’t wait to see if anyone notices because if you thought nobody cared about you, wait until you miss an instalment,” remarks Veldhuizen.  Simply put, if you can’t afford your car, get rid of it.  If you can’t afford your house, go and talk to the bank to negotiate an alternative payment plan or perhaps a capital payment holiday.

“If you don’t engage with creditors they will have no alternative but to relieve you of your assets,” he adds.

Veldhuizen outlines some practical ways to navigate financial difficulties:

Negotiating bond repayments

There has been an alarming surge in default payments in the Western Cape High Court with between 20 and 30 default judgments involving defaulting home loans being issued daily resulting in an increase in home repossessions across the region.   “For homeowners facing challenges in servicing their bonds I urge you to engage with financial institutions to negotiate revised repayment plans – many banks and lenders are willing to work with clients to find feasible solutions,” says Veldhuizen.

Interest rate negotiations

With interest rates at a peak, renegotiating the terms of loans and credit facilities can significantly ease the burden. Approach your lenders to explore options for reducing interest rates, capital payment (interest only) holidays and extending repayment periods.

Managing car payments

For individuals burdened by car payments amidst escalating petrol prices, discussing payment adjustments with the financing company could provide some relief during these tough times or you may consider downscaling or selling your car.

Explore debt consolidation

By combining various debts into a single, manageable loan can simplify repayment efforts and potentially reduce monthly payments.

Seeking expert legal advice

When facing imminent default judgments and potential home repossessions, consulting legal experts can offer valuable insights and guidance on protecting one’s assets and exploring alternative legal remedies.  By seeking early legal counsel and adopting negotiation strategies, individuals and businesses can navigate these turbulent waters and pre-empt potential losses.

“The early reception by a creditor to a pro-active plan wins against a defaulting debtor every time,” says Veldhuizen.

By staying informed about your financial situation, seeking expert advice from reputable legal firms and engaging in constructive negotiations with creditors and lenders, individuals can strengthen their financial resilience in the face of an unstable economy.