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Debt Solution for the Divorcee

by | Oct 12, 2016 | Debt Solutions

Mrs. G is a 37 year old Occupational Health and Safety Coordinator, and lives in Umbilo, Durban. Recently separated from her ex-husband, she has two children who are dependent on her for financial support.

After becoming over-indebted through a change in circumstance, she was placed on debt review to rectify the then current financial state. Below is a table that sets out Mrs. G’s income and expenses.

 

‘The divorcee fell upon hard financial times when a change in circumstance lead to her being unable to cover her monthly installments, and thus became over-indebted.’

 

 Income:
Salary (1st Party) R16,500
Salary (2nd Party) R11,250
 TOTAL:  R27,750
 Expenses:
Rent R5,000
Electricity R285
Landline telephone R400
Cell phone R400
Household insurance R850
Bank charges R115
School fees R3,500
Other R600
Other 2 R1,750
 TOTAL:  R12,900
 Available for debt repayment:  R14,850

 

‘She could not afford monthly debt repayments, on top of essential expenses as her available money was much less than the amount needed for her payment.’

 

As you can see from the above table, Mrs. G’s expenses add up to R12,900. As the total income is R27,750, she was left with R14,850 for debt repayment after expenses.

The below table sets out what Mrs. G owed towards the debt amount, on a monthly basis, before entering debt review.

Debt Interest rate Instalment
Installment Sale Agreement – BMW 10.75% R5,842.80
Edgars Account 23.20% R260.00
RCS Cards 21.00% R413.00
RCS Group 23.20% R836.58
Woolies Credit Card 22.90% R1,907.44
Woolworths Loan 19.00% R2,939.69
Std Bank Reg Blue 19.00% R775.30
Bluebean Mastercard 22.00% R2,886.86
Revolving Credit Plan 17.50% R2,529.00
 TOTAL:  R18,390.67
 Over-indebted by:  R3,540.67

 

‘Entering debt review with National Debt Advisors was the best decision Mrs. G could have made at the time.’

 

As we compare what Mrs. G earns to the R18,390.67 she owed monthly, taking into account her expenses separately as well, a troubling picture emerges from the shadows about her financial security. Clearly, paying off her debt on top of her monthly expenses and needs was not possible, pushing her further into debt with every purchase. This is why entering debt review with National Debt Advisors was the best decision Mrs. G could have made at the time.

Below is a representation of her newly structured payment plan with creditors, after National Debt Advisors got involved.

Debt Interest rate Instalment
Installment Sale Agreement – BMW 8.11% R3,589.00
Edgars Account 15.50% R108.97
RCS Cards 1.97% R104.12
RCS Group 2.05% R212.33
Woolies Credit Card 22.70% R629.28
Woolworths Loan 9.90% R1,430.05
Std Bank Reg Blue 19.00% R508.36
Bluebean Mastercard 22.00% R1,020.92
Revolving Credit Plan 17.50% R1,735.17
     
 TOTAL:  R9,338.20
 Amount saved monthly:  R9,052.47

 

‘This debt solution would improve Mrs. G’s cash flow and protect her from legal consequences for non-payment, letting her take care of her basic costs without worry’

 

The above table looks a lot more positive and realistic for Mrs. G. It shows the new low interest rates and instalments that Mrs. G’s debt counsellor at National Debt Advisors arranged with creditors. As a result, she is able to afford monthly expenses and debt repayments without worrying about making ends meet over the month.

Mrs. G now only owes R9,338.20 monthly on debt repayments, which means she is saving R9,052.47 every month thanks to NDA and their professional debt counsellors. Moreover, NDA also arranged for the interest rates to be reduced, which means she will save a lot of money on interest too. Better yet, she won’t have to stress about law suits or car repossession due to non-payment of debts. Now that is something that can take the worry out anyone’s eyes!

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

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