What to do when you’re blacklisted

In South Africa, statistics say that households use close to 80% of their income to service debt. Over 14 million South Africans have some form of credit or a loan.

While having the credit can be quite helpful, especially in cases of emergency, equally important is making sure that you service the debt on time.

Many people struggle financially due to unexpected expenses or job losses. This may lead to defaulting on scheduled payments.

In South Africa, statistics show that at least half of the more than 22.5 million credit-active consumers have impaired credit records. This makes accessing credit much more difficult. Some individuals who default find themselves blacklisted have a challenge when they need access to credit.

The reality is that a credit provider is very unlikely to provide further credit of you have unpaid bills. A blacklisting will show that you are likely to be a liability in terms of repayment. It reduces your chances of getting access to credit in future. Even if you pay your debts, your negative listing will remain on your record for at least two years.

Being blacklisted could mean a number of things. It could mean that you have defaulted on some payments, that you are in arrears or that you have a judgement made against you.

A good place to start when you are blacklisted is to assess your credit and financial standing.

If you have defaulted on a credit agreement, it usually means that the debt has been handed over to lawyers. When collectors start calling, this generally means that you can still negotiate to pay the amount off. Even if you settle the debt, it will remain on your credit record for two years, but it will show as “paid off.”

You can also enlist the help of a debt counsellor if you find yourself in a debt spiral.

Being in arrears means that you’ve fallen behind on your scheduled payments. This will reflect on your credit record for a set period of time.

A judgement against your name is very serious and can be difficult to reverse. It will show on your account for five years. If you have an outstanding judgement, it remains active for 30 years and a credit provider can hold you to that debt for 30 years.

If you do find yourself blacklisted, it’s always best to attempt to settle the debt.

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