A real example of a consumer under debt review with DCGSA
Most SA consumers keep creating debt to cover their existing debt
A quick fix means the bigger picture is often missed. I thought you may be interested in an example debt review clients we have recently assisted.
These consumers’ combined net income of R35,850 was not enough to cover all the household expenses and debt repayment of R27,440.75 a month. After putting together a budget, they were shocked to discover they needed R20,000 a month for rates and taxes, water and electricity, medical aid, vehicle insurance, school fees, petrol, groceries, cellphone and internet contracts, life insurance policies and more.
They only had R15,850 to cover debt, which was not enough.
The reality is that most consumers keep creating debt to cover their existing debt, creating a snowball effect.
Working with the consumers, we adjusted their household budget — making cutbacks where possible. We also brought their vehicle insurance down by moving them to Meliorleaf, specialists in insurance for consumers under debt review. Their new household budget would be R18,300.
I worked out one affordable monthly debt repayment of R17,500 from their next payday, leaving them relieved and educated on the way forward.
Reducing their interest rates and locking in the home loan and the vehicle interest rates for the term under debt review, will save them of over R65,000 worth of interest. It’s possible then to shorten your term by paying more when you can afford to.
Under debt review, consumers make monthly payments through a payment distribution agent, registered with the National Credit Regulator, who are responsible for distributing payments to the credit providers. Debt Counselling Group SA (DCGSA) works with DC Partner, a distribution payment partner in SA.
The personal relationship I have built with them over the past 12 years means that we know their systems and work well together for the consumer’s best interest.
DCGSA works with its clients to make sure they have a successful debt review. Our office is waiting to assist you too: take the first step today, for a better tomorrow.
About the author: Casper le Grange is a registered debt counsellor with the National Credit Regulator
This article was paid for by the DCGSA.