TAGS

Success Story: Becoming debt free

Support along the path to becoming debt free

*Heather started working with a Tararua REAP budget adviser as 20 year old, who suffered from anxiety and often found it too hard to attend appointments.

Heather has been in and out of a variety of work during this time.  Whilst on the income support Heather has had her benefit reduced for non-compliance issues and at one stage it was completely cut off leaving her with no income.

Our Financial Mentor and Heather talked about her “Goals”.  Priority 1 was she wanted to get debt payments sorted with weekly payments that worked within her budget. She was constantly getting calls/texts/email/letters from creditors demanding payment and found these times very stressful.  Mail was often thrown out without opening it, Heather wouldn’t answer her phone if an unknown or private number called as she feared it would be a debt collector.  She wasn’t sure how much debt she had and who it was with as.  Not a good situation as when no repayment arrangement is made the debt is sold on to a debt collector.

Starting point was completing an Equifax Free Credit Report, which gave all the debt information needed: $6077.29 worth of debt.  The bulk of the debt was listed with a debt collection agency, other debt she owed was $602.88 to Work & Income for advances and a court fine of $150.00.

Heather and our Financial Mentor completed her first draft budget worksheet; the weekly deficit was huge. There was no movement to pay all her creditors their normal minimum amount they expect. Baycorp wanted $100 per week payment on each account – two accounts outstanding. Our Financial Mentor asked for more time to get all creditor information before making a payment plan (this gives me more time to look at other options). After negotiating with two other debt collection agencies they agreed to $5 per week each on the condition the payment amount was reviewed in 3 months’ time.

This support greatly assisted Heather as our Financial Mentor helped her create and action a plan that supported her debt repayment.  This helped reduce Heathers confusion and worry and supported her on the path to being debt free.

*Name changed to protect identity.