Debt Solution for a Single Dad
Mr Y is a single dad from Victoria Park in Queenstown, which is located in the Eastern Cape. As the sole breadwinner of his family, he supports his daughter, mother and father. This financial burden places a lot of stress on him.
Desperate for help solving his debt problem, he contacted National Debt Advisors, asking if they had a debt solution for a single dad. He is responsible for taking care of his loved ones and was unable to meet their needs because of his debts. One of our professional debt counsellors drew up a budget for Mr Y to assess his current financial situation.
‘Mr Y owed R11,367 monthly on debt, but only had R5600 a month’
| Net income | R14297.00 |
| Living Expenses | |
| Rent | R750 |
| Board to Parents | R2000 |
| Cell Phone | R200 |
| Vehicle License | R1000 |
| Vehicle Maintenance | R200 |
| Vehicle Fuel | R350 |
| TV License | R320 |
| Clothing | R250 |
| Food & Households Goods | R2500 |
| Contingency | R227 |
| Bank Charges | R100 |
| Other | R800 |
| Amount left over for debt repayment: | R5600 |
‘Mr Y was over-indebted, as he was short of R5767 monthly’
Mr Y was paying off numerous debts. So his National Debt Advisors’ debt counsellor drew up a table listing his monthly repayments.
| Debt | Interest Rates | Instalments |
| Revolving credit facility: Micro Loan | 30.9% | R901 |
| Micro Loan | 30.9% | R1763 |
| Micro Loan | 23.20% | R2690 |
| Vehicle finance | 12.00% | R3699 |
| Personal cash loan | 33.75% | R 2314 |
| Total monthly debt repayment: | R11367 | |
Financial Assessment
Mr Y was over-indebted, as he owed R11,367 monthly on debt, but only had R5600 left after all of his basic expenses. We established that Mr Y was over-committed, as he was short of R5767 monthly, when it came to his debt repayments. He could not afford his debt obligations. Accordingly, we advised him to go under debt counselling.
‘Thanks to NDA, Mr Y is saving R6354 monthly!’
The Way Forward
Mr Y’s debt counsellor at NDA approached his lenders to discuss reducing his monthly debt repayments. We drew up a repayment plan for Mr Y, proposing lower rates, instalments and fees, and a longer repayment period.
‘Mr Y only pays R5013 once monthly now!’
Once his lenders accepted, Mr Y once again had a positive cash flow, so he could afford to look after his family and to pay off his debts. It also meant Mr Y’s lenders could not pursue legal action against him for two months, while his debt counsellor negotiated the terms.
The below table shows the reduced instalments and rates we arranged for Mr Y.
| Debt | Reduced Rates | Saved on Rates | Reduced Instalments | Saved on Instalments | |
|
Revolving Credit Facility: Micro Loan |
14.01% | 16.89% | R187 | R714 | |
| Micro Loan | 14.01% | 16.89% | R157 | R1606 | |
| Micro Loan | 11.50% | 11.7% | R240 | R2450 | |
| Vehicle Finance | 10.01% | 10.01% | R3540 | R159 | |
| Personal cash loan | 9.9% | 2.1% | R889 | R1425 | |
| Total monthly debt repayment: | R5013 | Total amount saved: | R6354 | ||
Consequently, Mr Y only has to pay R5013 once monthly to a payment distribution agency (PDA), who divides this amount between all of his lenders. Thanks to National Debt Advisors, Mr Y is saving R6354 monthly! He can now provide for his family properly and maintain a good standard of living.
Benefits of Debt Counselling
- Only has to make one payment a month to service all of his debts
- Can now afford his debt repayments and his living costs
- No longer has to endure the stress of being harassed by his lenders
- Will receive a clearance certificate once he has settled his debts
- Can sleep easy knowing he is on his way to financial freedom
For more examples of clients we have helped, have a look at our Case Studies section.
If you have a debt problem like Mr Y’s, contact National Debt Advisors today and we’ll provide you with a suitable debt solution.
