How can I prepare for retrenchment? | Fin24
 
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How can I prepare for retrenchment?

Aug 05 2013 15:24
A Fin24 user wants to know what he can do to prepare for possible retrenchment. He writes:

I have home loan debts. What measures can one take when faced with possible retrenchment?

Moeshfieka Botha, media consultant to national debt counselling firm Credit Matters, responds:


This is always very difficult. The first point of call would be to speak to your creditors, including the bank where you have your home loan.

Many creditors will under certain circumstances suspend payments for three months, especially to bond holders because they own the underlying asset. 

This needs to be discussed and negotiated with each creditor individually. Success cannot be guaranteed, but even if you just get one account sorted out, it is one less to worry about.

After this first step you could consider approaching a debt counsellor, but they can only assist in reducing the payments and not suspending them.

Also investigate how many of your credit agreements have built-in insurance policies against retrenchments, so that those can be written off. 

If you get a retrenchment package, perhaps look at making at least a payment or two in advance on the bond so that you do not have to worry about that for a few months.

But most importantly, please make the concerted effort to go and speak to your creditors BEFORE you start skipping any payments.

 - Fin24

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