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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