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Debt Solution for Low Income Earners

Mr. and Mrs. M are 52 and 48 respectively, Mr. M works as a butcher in Bloemfontein and the couple have no children to care for. Their total income is R4,400.00 per month. Due to a change in circumstance the couple become over-indebted and had to make a joint application for debt counselling.

After becoming over-indebted through the burden of financially supporting his wife as well as covering basic needs, on a low salary, Mr. M and his wife were placed on debt review to rectify the financial state as best and as soon as possible. Below is a table that sets out Mr. and Mrs. M’s income and expenses.

 

‘Due to a change in circumstance the couple become over-indebted while relying on credit for financial support’

 

 Income:
SalaryR4,400
 TOTAL: R4,400
 Expenses:
ElectricityR150
WaterR150
Vehicle fuelR700
Food & household goodsR1,300
Cell phoneR50
 TOTAL: R2,350
 Available for debt repayment: R2,050

 

‘They could not afford monthly debt repayments, on top of essential expenses, as his available money was a lot less than what they were required to pay’

 

As you can see from the above table, Mr. and Mrs. M’s expenses add up to R2,350. As the total income is R4,400, they were left with R2,050 for debt repayment after expenses.

The below table sets out what Mr M. and his wife owed towards the debt amount, on a monthly basis, before taking the initiative to enter debt review.

DebtInterest rateInstalment
Joshua Doore22.1%R597.00
Joshua Doore30%R1,037.00
African Bank credit card0.0%*R422.50
African Bank cash repayment32.1%R243.65
Home Choice32.65%R33.17
Addcon Real People15.5%R150.00
Jet0.0%*R1,000.00
 TOTAL: R3,483.32
 Over-indebted by: R1,433.32

*0.0% interest can occur when interest has been calculated into the final amount rather than monthly.

 

‘Entering debt review with National Debt Advisors was the best way for Mr. and Mrs. M to get out of their debt and reclaim their financial freedom.’

 

As we compare what Mr. and Mrs. M earn to the R3,483.32 they owed monthly, a troubling picture begins to show about their situation. Clearly, they could not afford their debt repayments, on top of their monthly expenses. This is why Entering debt review with National Debt Advisors was the best way for Mr. and Mrs. M to get out of their debt and reclaim their financial freedom.

DebtInterest rateInstalment
Joshua Doore18.1%R234.54
Joshua Doore0.0%*R380.11
African Bank credit card0.0%*R287.83
African Bank cash repayment27.74%R162.55
Home Choice28.2R116.38
Addcon Real People13.99R152.10
Jet0.0%*R380.12
 TOTAL: R1,713.63
 Amount saved monthly: R1,769.69

 

‘They now only owe R1,713.63 monthly on debt repayments, which means they are saving R1,769.69 every month’

 

The above table looks a lot more positive and realistic for Mr. and Mrs. M. It shows the new low interest rates and instalments that their debt counsellor at National Debt Advisors arranged with creditors. As a result, the couple are able to afford their monthly expenses and debt repayments with a bit more breathing room.

The married couple now only owes R1,713.63 monthly on debt repayments, as opposed to the previous amount of R3,483.32. This means they are saving R1,769.69 every month thanks to NDA. Moreover, NDA also arranged for the interest rates to be reduced, which means he will save a lot of money on interest too. Better yet, he won’t have to stress about law suits or and financial repercussions due to non-payment of debts. Now that is something that can take the weight off his tired shoulders!

Check out our other case studies to read about how NDA has helped other clients achieve financial freedom.

 

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