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MONEY CLINIC | I can’t afford to repay my debts because of Covid-19. Can I get a discount?

When it comes to repayment of credit agreements, transparency with credit providers will go a long way.

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A Fin24 reader who lost his job during the Covid-19 pandemic cannot repay his debts. Asking if it is possible to obtain a discount on the outstanding amount, he writes:

I am in the tourism industry in South Africa. I have lost all means of income due to the Covid-19 pandemic.

I have two credit cards, which I handed over for debt collection.

I have no income and I cannot repay them. I made arrangements to pay a small amount each month.

Is there a way to obtain a substantial discount on these debts to settle the amounts due?

Neil Roets, CEO of Debt bailout respond :

The impact of Covid-19 on the economy has been considerable. And some sectors have been hit very hard, such as the tourism industry.

When it comes to repayment of credit agreements, transparency with credit providers will go a long way. The first thing to do is confirm with the credit provider if there is credit life insurance on the accounts, to see if there might be coverage for the current situation.

If you are considering settling the accounts, your best bet would be to talk to them to explain the current situation and ask if they would consider settlement discounts. This is all up to their discretion, and if they were to consider it, it would be within their guidelines, but it’s definitely worth asking.

Questions may be edited for brevity and clarity.