Simon Dube, an Information Technology manager for a software company in Sandton, Johannesburg, is the sole breadwinner in his family of four and earns a total monthly income of R54, 123.94.
After taking into account Simon’s salary deductions, such as his medical aid, tax payment, insurance and pension fund, Simon is left with an amount of R39, 721.33 per month.
How Simon got into debt
Living in an affluent area in Sandton, Simon and his family have a reputation to uphold. The area they live in comprises of top businessmen and women and other professionals. Simon and his family constantly feel pressurized to keep up with the ‘Joneses’ and thus, always purchase the most expensive luxury items.
He started taking out bank loans and purchasing items on credit.
For his 40th Birthday, he decided to buy another car - a BMW - in order to show his neighbours that he was in financial wealth. However, he had to take out a loan from the bank in order to finance this car.
After further deducting his monthly living expenses of R14, 441.46, he was only left with a small amount of R25, 279.87 at the end of each month to spend towards his debt. But, his total debt come to R44,680.84 every month. Thus, he was unable to service his existing debt and fell into arrears on all his debt payments.
To avoid losing his house, Simon took out personal loans, bank loans and used his credit card to survive. He borrowed more and more money from the bank, on top of his loans with rapidly increasing interest rates. He also had a lot of retail accounts as his wife and children were not aware of the financial difficulty they were facing.
Moving towards managing debt
Unable to sort out his finances alone, Simon decided to turn to DebtButsers, as his debt obligation of R44, 680.84, was too much and had fallen into arrears on multiple accounts.
After drawing up a new budget for Simon, DebtBusters negotiated with his credit providers in order to devise a new payment schedule for his debt repayments. It is represented in the following table:
| Credit Providers | Original Annual Interest Rate | Monthly Debt Instalment Before Debt Counselling | New Agreed Annual Interest Rate | New Monthly Instalment |
| Bank loan 1 | 17.03% | R3,787.00 | 0.27% | R2,442.40 |
| Bank loan 2 | 14.10% | R3,224.63 | 0.23% | R964.56 |
| Bank loan 3 | 15.00% | R6,556.78 | 0.81% | R2,442.40 |
| Vehicle 1 | 10.25% | R3,392.60 | 7.76% | R2,776.00 |
| Vehicle 2 | 11.75% | R1,698.31 | 7.77% | R883.07 |
| Home loan 1 | 8.10% | R8,297.46 | 7.75% | R7,497.78 |
| Retail Account 1 | 21.00% | R1,610.79 | 0.34% | R46.24 |
| Retail account 2 | 21.00% | R927.00 | 0.34% | R290.00 |
| Retail account 3 | 22.65% | R640.00 | 0.35% | R170.00 |
| Retail account 4 | 22.65% | R475.00 | 0.35% | R74.00 |
| Retail account 5 | 15.00% | R1,289.55 | 0.50% | R240.00 |
| Retail account 6 | 15.00% | R859.81 | 0.20% | R500.00 |
| Credit card 1 | 18.55% | R9,242.22 | 0.32% | R3,360.00 |
| Credit card 2 | 18.55% | R171.00 | 0.32% | R69.18 |
| Personal loan 1 | 23.00% | R3,998.48 | 0.36% | R2,498.24 |
| TOTAL: | R44, 680.84 | R24,498.87 |
Simon’s 3 biggest loans consisted of 2 vehicle loans and his home loan.
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Find out moreDebtBusters' biggest concern was to ensure that Simon was able to include these assets in the debt counselling process. His vehicle finance companies agreed to negotiate with Debtbusters and include his vehicles in the debt counselling process.
A DebtBusters expert negotiator managed to reduce the interest rates on his vehicle loan from 10.25% and 11.75% per annum to 7.76% and 7.77% per annum respectively. The They also managed to negotiate with Simon’s credit provider and included the home loan under debt counselling too, at a lower interest rate.
DebtBusters solved all Simon’s unsecured debt under debt counselling too and in interest charges alone, DebtBusters saved Simon a total of R135,961.01 and reduced his total debt instalments from R44, 680.84 to R24, 498.87.
Once under debt counselling, Simon was able to service his debt on a monthly basis and all his unsecured debt will be settled within 60 months!
