Can I still start debt review with limited income due to the lockdown & COVID-19?
If your business is under severe strain and you feel like your income is going to be very low for the foreseeable future and already up to your neck in debt then you should seriously consider debt review.
But if you have no funds in the weeks ahead due to the lockdown you may wonder how can you pay for the debt review? The various banks have already said that if people apply for debt review in the weeks ahead they should simply send proof of how the lockdown and COVID-19 have affected their income. This will allow Debt Counsellors to make proposals which fall somewhat out of the norm such as several months with little or no payment before regular realistic payments start.
What If I Can’t Pay My Debt Review?
If you have already been in debt review for some time then you are probably pretty happy that you have been chipping away at your debts over time. They have been getting smaller for some time and now you may worry that all that progress might be lost due to COVID-19 and the lockdown killing your income.
Many of the banks have already told Debt Counsellors that if their clients are having problems due to the current crisis they can send in a Form 17.3 (an industry made up form, about a change in consumer circumstances). The banks will then try to cut consumers some slack and payment holidays or reduced payments can be arranged much like for those outside of debt review.
It is anticipated that nearly everyone may apply for such relief. What is required of consumers is that they provide some documentation to show how COVID-19 and the Lockdown affected their income. This could be a letter from an employer or accountant showing the reduced income.
The banks have also told Debt Counsellors that they are easing their strict rules on kicking people out of debt review the moment they miss a payment. They anticipate that most people will miss a payment at some point in the near future.
Most consumers will receive an almost normal paycheck this month so, it might be best to try to make your normal payment this month if possible to show good faith. A part-payment is definitely better than no payment.
The key is to talk to your Debt Counsellor (most are working through the lockdown from home). Don’t just skip payments and not reach out to them. The sooner they know that you need help and you send them proof of the problem, the sooner they can assist you.
Contact us as soon as you feel there might be a problem.