Debt Counselling: A case study
Mr X is a married father with 3 children. Both him and his wife earn a salary and all three children are attending school. Below is a comparison of their budget before and after debt counselling:
|Household Income||Household Income|
|Nett Income: Husband||R 20 874,74||Nett Income: Husband||R 20 874,74|
|Nett Income: Wife||R 4 894,58||Nett Income: Wife||R 4 894,58|
|Sub Total||R 25 769,32||Sub Total||R 25 769,32|
|Less: Monthly Commitments||Less: Monthly Commitments|
|Water & Electricity||R 769,32||Water and Electricity||R 769,32|
|Transport||R 2 000,00||Transport||R 2 000,00|
|Insurance||R 1 200,00||Insurance||R 1 200,00|
|School Fees||R 1 500,00||School Fees||R 1 500,00|
|Policies||R 1 300,00||Policies||R 1 300,00|
|Rates & Taxes||R 1 000,00||Rates & Taxes||R 1 000,00|
|Groceries||R 4 000,00||Groceries||R 4 000,00|
|Cellphone||R 350,00||Cellphone||R 350,00|
|Virgin Active||R 380,00||Virgin Active||R 380,00|
|Day to Day Miscellaneous||R 2 000,00||Day to Day Miscellaneous||R 2 000,00|
|Sub Total||R 14 499,32||Sub Total||R 14 499,32|
|Less: Credit Commitments||Less: Credit Commitments|
|Standard Bank Home Loan||R 8 350,00||Standard Bank Home Loan||R 6 680,00|
|MFC Vehicle Finance||R 2 500,00||MFC Vehicle Finance||R 1 750,00|
|ABSA Credit Card||R 850,00||ABSA Credit Card||R 510,00|
|African Bank Loan 1||R 1 500,00||African Bank Loan 1||R 900,00|
|African Bank Loan 2||R 900,00||African Bank Loan 2||R 540,00|
|Woolworths||R 588,00||Woolworths||R 350,00|
|Total||R 14 688,00||Total||R 10 730,00|
-R 3 418,00
- This serves as an example of how Consumer Wise Debt Counsellors can assist an over-indebted family with a shortfall of R 3418,00p.m to a family who are able to meet their monthly commitments and have R540,00 per month available for emergency expenses.
- Cellphone and gymnasium contracts are not credit agreements but term contracts and therefore has to run it’s contractual term.
- Miscellaneous expenditure includes milk and bread money, children’s canteen money, sin expenditures, etc.
- Most clients rightfully fear that their repayment terms are going to be extended because their monthly payments are reduced. This is not necessarily the case, since some credit providers are willing to reduce their interest rate to as low as 0% per month.
- With our new Credit Life option, we’re able to ensure that more money is paid towards your creditors ensuring that you are debt free in the shortest period possible.