Chat with us, powered by LiveChat

Debt Solution for IT specialist

Mr M is a 32-year-old IT specialist who lives in Cape Town with his wife and two children. Mr M earns R17,200 monthly, while his wife earns R9,000. Therefore, their total household income is R26,200.

As they felt financially secure, the married couple decided to subscribe to a vacation club. But as the cost of living increased, they began to struggle. They were also over-spending on entertainment and leisure. Accordingly, they couldn’t afford their debt repayments and fell into arrears.

‘Taking out a debt consolidation loan… tipped them into over-indebtedness.’

It was at this point that they decided to consolidate their debts by taking out a debt consolidation loan. They believed that this would increase their cash flow. But this decision was a big mistake, as it tipped them into over-indebtedness.

Below is a table outlining what the M family earns and spends on a monthly basis.

Mr M’s Salary:R17,200
Mrs M’s Salary:
R9,000
TOTAL HOUSEHOLD INCOME:R26,200
Expenses:
Vehicle maintenanceR400
Vehicle FuelR2,500
TV LicenseR100
ClothingR1,000
Food & household goodsR3,000
ContingencyR1,000
School feesR2,000
Bank chargesR200
RentR5,200
ElectricityR750
WaterR150
Cell phoneR600
Vehicle insuranceR500
Entertainment & leisureR6,300
TOTAL EXPENDITURE:R23,700
Available for debt:R2,700

 

As you can see from the table above, after expenses, Mrs and Mr M only had R2,500 available for debt repayment. However, the table below shows that they in fact owed R5,778 on a monthly basis.

DebtContractual interest rateContractual instalment
Vacation club subscription15.50%R779
Clothing account22.65%R199
Consolidation loan30.90%R4,800
TOTAL:R5,778

 

‘This debt solution would improve their cash flow and protect them from legal consequences’

To provide the family with debt relief, National Debt Advisors suggested they apply for joint debt review. This debt solution would improve their cash flow and protect them from the legal consequences of unpaid debts.

Below you will see the lower interest rates and instalments NDA proposed to the couple’s creditors, who accepted these debt restructuring terms.

DebtProposed interest rateProposed Instalment
Vacation club subscription0.34%R248
Clothing account23.75%R63
Consolidation loan30.90%R1,528
TOTAL:R1,839

 

‘Mrs and Mr M could focus on raising their two children without stressing about money.’

As a result, Mrs and Mr M were able to afford their debt repayments and their monthly expenses. Moreover, their credit providers stopped hassling them for payments. This put their minds at ease. As such, they could focus on raising their two children without stressing about money.

See the rest of our case studies, including debt solutions for a bachelorette, teacher and more.

Share this:

EMAIL
FACEBOOK
FACEBOOK
TWITTER
Visit Us
YOUTUBE
PINTEREST
PINTEREST

Free Call Back Form

Fill in the form below and a consultant will call you back today to help you resolve your debt problems in a few simple steps.
  • This field is for validation purposes and should be left unchanged.
Facebook Pagelike Widget

Sign Up To Our Monthly Newsletter