Debt Solution for Teacher
Miss T is a 46-year-old teacher at a government school. This single mother from Boksburg has two children to support, so it’s essential that she has enough money to take care of her family. She earns a salary of R8000 per month.
She wanted to give her children a decent home to grow up in. So, she took out a bond. Miss T also wanted to have reliable, safe transport to take her children to school and get to work every day. So, she also took out vehicle finance. Moreover, she took out DSTV, a cell phone contract, a clothing store card and a retail account that she could use at several stores. Furthermore, she got two credit cards.
‘Miss T needed help with her debt and fast. Thankfully, National Debt Advisors came to her rescue!’
A few months later, she was struggling to cover her debt payments and basic expenses. She fell into arrears on many of her accounts. Accordingly, she started taking out high-interest personal loans just to make ends meet each month. But this debt would only make her situation worse.
Miss T needed help with her debt and fast. Thankfully, National Debt Advisors came to her rescue! The below table lists Miss T’s monthly basic expenses and what she had left over for debt payment after covering these.
‘Miss T’s basic expenses total R3,700, leaving her with only R4, 300 for her debt payments’
| Salary: | R8000 |
| Expenses: | |
| Electricity | R500 |
| Cell phone | R100 |
| Petrol | R800 |
| Clothing | R500 |
| Food & household goods | R1500 |
| Contingency | R200 |
| Bank charges | R100 |
| TOTAL monthly expenses: | R3,700 |
| Available for debt: | R4,300 |
As you can see from the above table, Miss T’s basic expenses total R3,700, leaving her with only R4,300 for her debt payments. Below are the various debt payments that Miss T had committed herself to paying.
| Debt: | Original interest rate: | Original instalment: |
| Gold credit card | 18.60% | R380 |
| Credit card | 23.20% | R243 |
| Store card | 23.20% | R219 |
| Revolving micro loans | 16.00% | R770 |
| Vehicle finance | 6.52% | R 2,344 |
| Retail account | 23.50% | R4,307 |
| Total debt payment owed monthly: | R8,263 | |
| Over-indebted by: | R3,963 | |
‘Although she only had R4,300 available for debt payment, she owed a total of R8,263.’
From this, we can see that there is a big disparity between what Miss T owes and what she can afford. Although she has R4,300 available for debt payment, she owed a total of R8,263. This means she had to find an additional R3,963 in order to bring her accounts up to date and avoid devastating legal repercussions. If she did not pay her debts soon, she would lose her home and car.
| Debt: | Restructured interest rate: | Restructured instalment: |
| Gold credit card | 0.00% | R145 |
| Credit card | 0.00% | R120 |
| Store card | 0.00% | R108 |
| Revolving micro loans | 0.00% | R1,171 |
| Vehicle Finance | 6.55% | R1,400 |
| Retail account | 0.00% | R1,350 |
| New total debt payment: | R4,294 |
‘NDA arranged for Miss T’s total debt payment to be reduced to R4,294’
After assessing Miss T’s finances, NDA established that she was over-indebted. Subsequently, she qualified for debt review. This debt solution provides legal protection against repossession and garnishee orders.
Once she entered debt review, NDA arranged for Miss T’s total debt payment to be reduced to R4,294. As a result, she could afford to make her debt payments and cover he basic expenses every month. Suffice it to say, Miss T was very grateful for NDA’s help and the debt review process!
