Problem
After being ill for six months with tuberculosis (TB), Themba Dlomo was unemployed for a further 3 months after his illness. This meant that his household-his wife and two kids- which depended on his salary, experienced a great deal of financial pressure.
The following year, Themba was able to secure a contract lecturing position. Unfortunately, because it was a part-time position, he was only paid for the nine months of the year that he worked.
This left the Dlomo family without an income, and unable to pay all their monthly debts for more than three months.
Even after making significant cuts to their lifestyle budget and trying to use their credit card to pay their debts, they were still drowning in debt.
In September 2019, Themba and his wife decided they had exhausted all of their options, and they needed a more permanent way out.
This is when they signed up for debt counselling at Meerkat.
When they started the debt counselling (debt review) process, the Dlomo family had a total debt amount of
R591 157, with a monthly installment of R41 000.
Below is a list of the debt / expenses they had accumulated:
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2 Vehicles
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2 Credit Cards
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1 Overdraft
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1 Store Card
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4 Personal loans
Solution
After registering for debt counselling at Meerkat, our expert Debt Counsellor successfully reduced their monthly repayment from R41 000 to R18 000.
Our Debt Counsellor also negotiated with all creditors to reduce the interest rates from an average interest rate of 36% to a new interest rate of 8%.
Our Debt Counsellor then put together a monthly budget that included ensuring all their debts were paid, and that they had some money after for a bit of breathing room.
The Dlomo’s then paid one reduced monthly installment for all their debt to Meerkat.
Meerkat took over correspondence with all their creditors and ensured that:
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Creditors and the credit bureaus knew the Dlomo’s were undergoing debt counselling, ensuring that their home and cars were legally protected from being repossessed.
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All creditors were paid in full and that debt repayments were made on time.
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No creditors harassed the Dlomo’s any further, giving them the freedom to answer their phones without being worried that it was a debt collector.
In July 2023, the Dlomo family will have successfully completed the debt review process and thanks to debt counselling at Meerkat, be completely debt-free!
After being issued with a debt clearance certificate from their Debt Counsellor, their debt review flag will be removed from their credit reports, and they will be able to start applying for credit again.
The debt review process will not harm their chances of accessing credit again. If anything, it will improve it because they would have been able to get back on track with all their debt repayments.
Keen to learn more about Debt Review? Check out this article.
Do you want to start your journey towards becoming debt-free? Let us contact you!
