Is it legal to hike debt instalments? | Fin24
  • Load Shedding Schedules

    Find information for Johannesburg, Durban, Cape Town and other cities.

  • State Wage Bill

    Budget 2020 | Treasury announces three-year R160bn proposal to cut state wage bill.

  • Debt-ridden

    Eskom is cursed with no good choices as it continues to struggle for survival.


Is it legal to hike debt instalments?

Feb 12 2013 09:33
A Fin24 user wants to know if increasing debt instalments annually is legal. She writes:

I have been under debt review since 2008 to date. My December 2012 payment increased from R2 054 per month to R2 156p/m.

On querying the increase, I was told that there is an increase every year; however, I was not aware of that.

My concern is that after about four-and-a-half years, surely there should be a reduction in premiums - my debt is still far from over.

This process has helped a lot. However, never again -  I would rather make an arrangement with the creditors.

Friedl Kreuser of Summit Financial Partners responds:

That seems in order. It is fairly standard for the total debt counselling payment to increase by 5% every 12 months.

The reason is, as the reader notes, there is still much debt left to pay off, and premiums need to be increased to help the consumer settle their debt as fast as possible and counteract the interest being charged while they pay low instalments.

The annual increases would likely have been included in the payment proposal which the consumer (hopefully) signed off, but they should have been pointed out to her.

Hopefully the consumer is also receiving annual salary increases, which will support the increased debt counselling payments.

If she isn't, and she is struggling to keep up her payments, she should inform her debt counsellor of this.

She should keep in mind, however, that not increasing her debt counselling payments means she will take longer to settle her debt and ultimately remain under debt counselling for longer.

 - Fin24

Do you have a pressing financial question? Post it on our Money Clinic section and we will get an expert to answer your query.

Disclaimer: Fin24 cannot be held liable for any investment decisions made based on the advice given by independent financial service providers.

Under the ECT Act and to the fullest extent possible under the applicable law, Fin24 disclaims all responsibility or liability for any damages whatsoever resulting from the use of this site in any manner.  

money clinic  |  debt  |  debt review


Read Fin24’s Comments Policy publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot


Cuts to the public sector wage bill took centre stage at this year's Budget

Voting Booth

Do you support a reduction in the public sector wage bill?

Previous results · Suggest a vote