Debt threat

By: Christine Liggins

The last few months may have been loads of fun with Christmas shopping sprees and holiday treats – all so easily racked up on the credit card, afterpay schemes and buy-now-pay-later deals. But now, back to school expenses may be piling on top of the New Year bills and if you feel like there is no way to make ends meet, you’re not alone.

New Zealanders are highly likely to be worried about financial problems. When FinCap surveyed people from 2017 to 2018, half of us were just treading water or sinking. FinCap is a Government supported trust that aids all budgeting and financial capability services in New Zealand, so they see a wide range of people and problems. Other organisations surveying their members have identified that money worries are keeping plenty of us awake at night.

No one plans to have personal debt get out of control but commonly it happens when a relationship breaks down or a work situation changes, and both are more prevalent during our summer holiday season. Also, an accident or the onset of a chronic health condition can create unexpected financial woes.

People often try to sort the problem out on their own, but organisations that provide non-judgemental and informed support can improve the outcomes for people struggling with debt. For a starter, they can provide much needed relief to stop people from feeling overwhelmed, which is the first step towards making lasting changes.

Budgeting services listed at moneytalks.co.nz offer guidance for free and, in Rodney, there are six locations for budgeting organisations and one debt management specialist service, Debtfix, which I recently co-founded. These experienced organisations have a good understanding of the law and the options that work best for the borrower, as well as the people they owe money to.

Often professionals that seem like a good option, such as lawyers and accountants, may not have the specialist knowledge, and they frequently suggest bankruptcy, which has dire consequences. A quick Google search for debt management will most likely result in debt consolidation companies that buy your debt and charge you a higher rate of interest. They are unlikely to help you address your financial problems.

On the other hand, a debt specialist investigates options such as negotiating a repayment plan with organisations that are chasing you for money and freezing late payment penalties that just escalate the debt. Most people genuinely want to repay their debt. With good guidance and support they can learn from a debt disaster and gain valuable financial skills for a more stable future.

For more free, non-judgemental advice and support phone Warkworth Wellsford Budget Service at 423 7123 or Stepsforward Orewa at 09 424 4584.

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