Best Tips when you lose your Job while under Debt Review

In this article, we share our best tips when you lose your job while under debt review and also cover other important aspects to consider such as, what happens when your partner dies and he/she was also a joint application, credit life insurance benefits, what happens to your employee benefits, UIF payouts and many more.

Best Tips when you lose your Job while under Debt Review

1. You must inform your debt counselor right away if you lose your job. Show evidence of your unemployment and your inability to make your agreed monthly repayments and your debt counsellor will communicate with your creditors on your behalf.
2. Find out if credit insurance was included in your debt review application. This can help in case of temporary retrenchment, credit life insurance will cover your debt review installments for up to 6 months.
3. If a debt review court order has not been granted, your counsellor will make use of one of the remedies set out in the National Credit Act to postpone payments under debt review to allow you to obtain alternative employment or to reduce the monthly repayments to accommodate your altered financial situation.

What happens when your partner dies and he/she was also a Debt Review joint applicant?

When your spouse dies, their debt survives, but that doesn’t necessarily mean you’re responsible for paying it. The debt of a deceased person is paid from their estate, which is simply the sum of all the assets they owned at death.

If your spouse had a will, the executor named in the will administers the estate to pay off creditors. If your spouse didn’t have a will then the distribution will take place according to the laws of intestate succession, whereas if you die leaving a valid will, your executor will distribute in accordance with your wishes. 

If you own property jointly with your spouse and your surviving spouse is unable to make the monthly bond repayments, the property may be repossessed by the bank. Importantly, if you are married in community of property, remember that all assets and liabilities from before and during the marriage are shared jointly.

This means that, in the event of your passing, all the debts in the joint estate must be settled and only then will your surviving spouse have a claim for their 50% of the net estate.

If you have joint debt, such as a joint credit card with your spouse, both you and your spouse remain responsible for that debt. If you die, the executor can use money from your estate to settle a portion of the joint debt. However, if there is no money available to do so, your spouse can be held responsible for the full amount, placing an additional financial burden on them.

Where the debt is held in your name but you have appointed another person to stand surety for that debt, they can be held responsible for the debt in the event of your death and, if the debt is secured, the creditor will be entitled to repossess and liquidate the asset to recover their monies.

Our tip – Make sure that there is enough liquidity on the estate to avoid unnecessary financial burdens.

Other important things to consider.

1. Creditors might want to use your employment benefits such as UIF, Pension and Provident to service your debt.
2. It’s highly advisable that you get insured. (credit, life and funeral).
3. Beware of joint credit, especially unsecured debt.

Still unsure and need further assistance?

Contact one of our professionals to learn more on 0410125036 or send us a message on our Contact Page.

Visit our Facebook Page