Credit Card and Overdraft

[Alice Rain]

It's me again! Is there any other way other - besides running away - than declaring myself insolvent to cancel my credit and overdraft?

Thanx

Alice - wish I was Alice in Wonderland, I could just go down the hole!

[AndyD]

I don't understand what you mean when you say you want to 'cancel' your credit card and overdraft debt....

Are your debts business or personal?

Just out of interest how deep is the hole that you're in? How much do you owe as a multiple of your monthly earnings?

Have you approached your creditors and requested restructuring of the repayments? Have you made any sort of deal with any of them.

What kind of assets do you have and how long have you had the various debts?

Have you already defaulted on the repayments or are you just anticipating that you won't be able to keep up the existng payment regeime much longer?

What is it that's changed that now means you can't meet your commitments?

[Basment Dweller]

Credit card and overdraft debt can't just be cancelled away. Do you have any source of income?

[ians]

This was going to be my next topic - overdraft and credit card limits.

Alice you can approach the bank and setup a payment plan. There is one catch, minimum payment, you have to pay at least the interest amount every month. I am assuming you have had this problem for a while already? The bank monitors your account all the time and if there is no movement in the account for a period of time there they start getting nervous or if you are exceeding your limits.

[Newretailer]

Part of the reason banks go under is because people try to run away from their debt. The honorable thing to do is to go and see the bank, set up a payment plan and stop spending money you don't have. It may sound harsh, but learning how to properly deal with money is one of the best gifts you can give yourself.

[Alice Rain]

Hi AndyD and everyone else

Thanks for the responses. I will go and see the bank manager and see what she says about a payment plan. I got the overdraft because the bank manager was trying to help me when I was locked out of my place of employment and that was around March 2013. The credit card I've had a bit longer, can't remember, maybe two years prior. The only other debt I have is the rent and my dstv of R27.00 pm.

Besides my caravan that I live in I'm the only asset that I have!

The reason I can't make my commitments, there's just been no work [transcription] however I'm waiting on another writing project which will be on-going and other than that making stuff and will post some pictures soon for orders.

Until later, will keep you posted, thanks again everyone!

[Alice Rain]

Hi All, an update! I went into the bank and phoned the credit card division and they've cancelled my credit card - yipppeeee! I don't know why they wouldn't do it months ago when I made enquiries but now it's done and I just have to pay a minimum amount each month. And I've now got work online and am writing articles for Africa so it's coming together finally! Thank God! And thanks for all the input.

[adrianh]

Alice, don't get freaked out about debt. 99% of companies including banks make a lot of noise and threaten you but they don't just f..k your life up overnight. Most of them have lots and lots of customers that owe them money and it is simply not viable to blacklist them all. If they were to do so then they would have no customers left and 99% of the people in the country would blacklisted.

The best thing to do is to be open and honest and explain your situation to them. Remember, they want the money so it is not in their interest to entirely destroy your life. As long as you speak to them and pay a bit every month they will stay off your case.

Don't let them intimidate you, the nignog on the other end of the line is paid to be a harda$$ so you shouldn't take their $h1t to heart.

I speak from ongoing experience.

I have a debt with Nedbank that I am repaying slowly. One of the "consultants" phoned me a couple of days ago and went off at me. She was very rude and threatened me with all sorts of action. I told her that I don't have enough money to cover the required payment and she got very abusive. She said that she was going to send the sheriff to get my furniture. (She doesn't have the power to do so) I put the phone down on her. She phoned me the following day and she was a lot more reasonable. We agreed that we wont be rude to one another and that I would pay as much as I can.

Bottom line: Don't let them freak you out. They are paid to be harda$$es but at the end of the day they will take whatever they can get.

[Dave A]

As long as you keep chipping away at your debts, people tend to be fairly patient.

The problem with credit card debt, of course, is the high interest rate. You really want to wipe that out as quickly as possible.

[reuphk]

As long as you keep chipping away at your debts, people tend to be fairly patient.

The problem with credit card debt, of course, is the high interest rate. You really want to wipe that out as quickly as possible.

Dave A, you are so right. Many times people do not look at the interest rate that they are charged and simply pay to pay. This is like driving your car and not understanding that your petrol consumption works in kms per litre.

If you are in debt, here are some small tips (may or may not work for you depending on your situation):
1. List all your accounts including the balance, settlement amount (if settlement discounts are allowed) and the interest rate. Also list the minimum payment amount expected.
You now know exactly what you are in for.
2. If you have any long term loans e.g. property, check if there is an opportunity to consolidate you accounts (some banks do this) or if you can borrow from the loan account as these normally have a lower interest rate and longer period to pay.
Your intention here is not to create more liquid cash i.e. you dont want to consolidate or take out more money from your loan just so you have more money to spend at the end of the month. Your reasoning is to mimimise your interest and therefore your debt.
3. Work out your payment plan for EVERYTHING. Pay those with the highest interest rate first or pay the most you can to these.
If you consolidated, then no worries, simply now pay your loan account ALL the money to be able to reduce it again. If not, you want to get the highest interest charges taken care of first. This would be stuff such as: Microlending accounts; credit cards; personal loans; etc (normally in that order)
4. Depending on how "bad" your situation is, also setup to pay more on your longer term loan (bond account) as a form of savings.
You will be surprised at how much you gain by paying just R100 more on your long term loan account.

Of course, the best advise and option #0 is, spend less than what you earn / your income is and save at least 10% of earnings.
But bottom line - if you know that the small car gives you 15km per litre and the bigger one only 8kms per litre - which car will you drive around with?
Which debt do you get rid of first...

[ians]

Definitely the one with the 8 km per liter because it just sounds like it has plenty vooooma. That's what life is all about the pleasures in the journey thru life😜

[Gfacius]

Here's an interesting one...

I had an overdraft facility with Nedbank for many years. The last time my SME manager phoned me asking if I needed to up my facility from 80K to 100K because I was always working just within my limit. I jumped at this opportunity as no one has ever made it this easy! Little did I know that she eventually took an opening in the corporate side of Nedbank and I was left with a new SME manager...

This is where everything fell apart...

In fact in some way it was my fault too...

My previous SME manager faithfully asked each year for my Financials to keep the facility. This spoiled me so much that I didn't even think of this factor a year later when my financials were due and for some reason also didn't get them done by my accountant. The second year went by and Financials were the further-est thing from my mind. Then out of the blue the credit department at Nedbank phoned my wife (who was just unlucky enough to be at home at the time of the call) and stated that they were recalling my overdraft and that the account would be frozen the same day!

When I was informed of this by my wife I immediately phoned them and argued that they could not do this to me as there were customers deposits for jobs that had to be done sitting in the account and how can they do this when I'm not even over my limit but was rather about 15K below my limit of 100K also I thought we had a very good relationship and I was a very good customer after all these years without incident?

To cut a long story short, there was nothing I could do as I was currently going through a cash flow crisis and we were also under debt revue at the time and everything with Nedbank was behind... my homeloan, my credit card and now my overdraft was in the spot light because there were no Financials submitted to the branch for 2 years running.

I phoned my accountant and asked what she would charge to get these financials up to date and she insisted on R8K... well obviuosly I was now in a catch twenty-two scenario so I did the only thing I could do at the time (also due to me being very angry at Nedbank) and that was to open another business account at FNB.

I informed all my clients of my new account details and carried on trading with the full intention of paying back the overdraft at Nedbank with an amount I could afford every month (the monthly interest on the overdraft p.m was about R2500. Due to limited cash flow and slow business at the time i fell behind with regular payments to the overdraft facility and was not really even affording the interest each month and was eventually handed over to attorneys.

I then commenced again paying what I could which was around R1000 a month and eventually couldn't keep this up, so made an appointment to go and see them. I explained the problem about the financials to them but this really didn't help much. They wanted me to up the payments to R10K for 9 months and told them that there was no way I could afford this (keep in mind that my home was surety for this overdraft facility and when I bought my home we put in R250K so there was no way that I was going to loose this too).
So in other words, liquidation or sequestration was not in my best interest!

I then said that I will do my best to at least pay R2000 per month and the attorney or acting attorney said that this would be better. These payments went on as best as I could afford them and yes there were one or two months that I just couldn't pay this but always caught up where I could. (Due to the account being frozen and handed over to the attorneys, there was no more interest payable...only the capital)

The latest now is I skipped end of august payment and September but stated on an email in beginning of October month that I had paid August R2000 payment and will be paying another R2000 for September before October ends... This was answered with an email back from the attorneys office that reads...


"Dear Gary

Kindly be advised that no payment was made in September’14. Furthermore the amount that you are paying is not sufficient.

Our client requires an amount of R5800.00 over 12 months.
Should you be unable to pay this amount, we will have no alternative but to proceed with legal action."

I was very surprised at this as I did state in my previous email to them that I would be catching up with an additional payment before October ends for September...which I did.

What I would like to know is...is this just another scare tactic for me to pay more? Or is this comment a legal and legitimate claim that they can just decide for me what amount I have to pay back per month without looking at my affordability or current statements to prove the affordability?
The fact is that Nedbank has put a restriction on the account i.e money can be eft'd or deposited to the account but that's it. I cannot view any statements on line etc. The attorneys also told me that there was no more interest on top of the capital amount which is a bonus yes... But this really doesn't help if you cannot even afford the said payment of R5800/month???

Really starting to panic now as I definitely cannot afford this on top of my current monthly exposure...

I have since then asked the Attorneys if they will at least accept R2900 over 24 months?
No answer as yet....

Do you think it is within my right to ask this and must they accept my offer? Or not....would they then sell my house? (and this won't help me as I will loose everything because I run my business from home....

Very traumatic times, I must say!

Tnx

[Alice Rain]

You certainly have my sympathy. My credit card is was only R12 000 and my overdraft R8 100, I cancelled the credit card but have not been able make the 'arranged' payments and emailed them to which I received no response. I kept getting these sms's with a number to phone and eventually they phoned me and I told them it doesn't help to send me an automated text message with a number when I don't have funds to phone the number and that I would start paying as soon as I have the funds. They informed me that an additional R200 will be added to the account in interest so who knows how much I'll end up owning them! They'll be phoning me everyday, so I will just not answer the call because it's stressful and I'm trying to get the work out. Now I've just received a text message from them that needs to be downloaded! Why can they not at least give someone a 6 month window to get themselves together before turning into rotweilers! And now there's no funds in my cheque account either so the overdraft's also going into the red and frankly I need to focus on work and will not worry about them.

I wish you all the best and hope you come right one way or another.

[Dave A]

(Due to the account being frozen and handed over to the attorneys, there was no more interest payable...only the capital)

I hope you've got that in writing. Maybe times have changed, but when I had an OD put onto managed accounts way back when, the account fees stopped (as well as all statements, access etc. as you mention), but the interest clock kept running.

Is the business incorporated, or a sole proprietor?

[Gfacius]

Hi Dave, the company is a CC...registered in 2006.

I've had no answer yet back from the attorneys about the amount they wanted. I guess they are stumped by me querying "affordability", who knows? Maybe I'll get the legal action by mail or they waiting to see if I will pay what I asked which was R2900 for 24 months.