City of Joburg offering deal to those who battle to pay

Property owners consuming municipal services like water and electricity are drowning in debt, judging by the latest figures of an astounding R126.3-billion municipal consumer debt.

Figures from the National Treasury show that the debt by those consuming municipal services is growing at a threatening rate. The statistics reveal that the aggregate municipal debt has grown from R117.7-billion to R128.3-billion in the last two quarters.

I recently read an article in the newspaper titled "Your recession survival guide", in which analysts and economists seek to advise consumers on how to navigate turbulent times, such as the recent recession, junk status and struggling economy.

The advice ranges from consumers having to look into tightening their budgets, to cutting out unnecessary spending - having to prioritise their needs over their wants in spending.

Customers facing tough economic times are urged, in the spirit of cutting back, to consider, for instance, resisting the temptation to upgrade that expensive cellphone contract, consider cancelling the satellite TV subscription, terminating the gym membership and taking up jogging, or cutting down on entertainment and eating out.

Those unable to service their bond or car repayments and drowning in debt are also advised to approach their creditors to negotiate repayment plans. However, what seems to be the last thing on many struggling consumers' minds is how they are going to continue to pay for their water and electricity. Though crucial to every household, municipal services are often an afterthought.

The latest figures show that the largest component of the total debt owed to municipalities related to households, which accounted for R86-billion. Consumers unable to service their municipal debt often sit back and do not inform their local municipality, then this forces local councils owed billions of rands to cut municipal services.

If customers fail to service their municipal debt, they should approach their local municipalities for help. Not only is it an inconveniencing for a customer to have essential services such as water and electricity cut off from their homes, but the customers could find themselves struggling to repay their debt in the long term because of compounding interests as a result of them ignoring the debt. The process of having their services restored could also lead to more fees.

The City of Johannesburg, in its efforts to try to shield customers who are battling to pay their municipal services, has created a friendly process that allows customers to make payment arrangements.

Customers who suddenly find themselves unable to pay their monthly municipal bills are encouraged to enter into a written agreement with the city to repay a certain amount by signing an acknowledgement of debt, wherein customers arrange with the municipality to pay the outstanding amounts in instalments.

The customers would also be assisted in completing lifestyle assessments to determine affordability with regard to their outstanding debt.

The council also has the expanded social package, which is aimed at assisting vulnerable customers.

Customers such as those who might have lost their jobs, those with limited income who are struggling to keep their accounts up to date, pensioners and child-headed households who own residential properties are encouraged to register for this social net.


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