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Debt Solution for Clerk

Miss L is a 26-year-old Senior Administrative Clerk for the Department of Education (DoE). She lives in Durban, Bluff in Kwazulu Natal and boards with her parents.

Miss L became over-indebted after taking out a number of credit cards and clothing accounts. She had a tendency to overspend and did not have a budget in place, so she began racking up a lot of debt.

‘Before she knew it, Miss L was caught up in an unmanageable debt spiral’

She then fell into arrears and started taking out personal loans just so she could make her monthly payments.  Before she knew it, she was caught up in an unmanageable debt spiral.

The table below sets out her salary, expenses and what she had left over for debt.

 

Salary R8,700
Expenses:
Board to parents R600
Cell phone R450
Vehicle insurance R600
Vehicle Fuel R900
Clothing R300
Food & household goods R1000
Contingency R500
Life, health & critical illness insurance R600
Bank charges R150
Bank charges R100
TOTAL: R5,200
Available for debt: R3,500

 

As you can see, she earns a monthly salary of R8,700. While her monthly expenses total R5,200, which leaves her with R3,500 for debt repayment.

 

Debt Interest rate Instalment
Clothing account 22.65% R419
Credit card 20.25% R1,290
Clothing account 22.65% R271
Credit card 18.65% R533
Personal loans 19.50% R1,997
Credit cards 18.75% R823
Personal loans 15.50% R3,000
TOTAL: R8,333

 

Miss L owes R8,333 monthly…her  debt obligations exceed what she can afford by R4,833’

However, the table above shows that Miss L owes a total of R8,333 monthly. If we look at what she has available for her debt repayment every month, we can see that her debt obligations exceed what she can afford by R4,833. This means she was deeply over-indebted.

 

Debt Interest rate Instalment
Clothing account 1.12% R148
Credit card 1.07% R452
Clothing account 1.12% R96
Credit card 1.03% R180
Personal loans 1.05% R586
Credit cards 1.03% R478
Personal loans 0.75% R881
TOTAL: R2821
Saved: R5,512

 

‘National Debt Advisors arranged for her instalments and interest rates to be slashed! She now pays R5,512 less monthly’

Miss L was in a very bad situation, which may have cost her, her personal assets or resulted in a garnishee order being attached to her salary. But, fortunately National Debt Advisors got Miss L into debt review just in time.

Her debt counsellor at National Debt Advisors arranged for her instalments and interest rates to be slashed! She now pays R5,512 less on her debt repayments.  This debt solution provided her with immediate financial relief, as she could afford these new rates, on top of her basic expenses. Finally, Miss L could see the light at the end of the tunnel!

To read about how we’ve helped other clients, see our other case studies.

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