Debt stress and the flow-on impact on personal relationships should not be underestimated.
I have worked in a variety of roles across lending and Personal Insolvency for the last 15 years and purely from my own observations I see a very high proportion of relationships break down when under debt stress. On average, our involvement with clients has a life-cycle of 4 – 5 years; during those cycles I have personally seen an estimated 40% of couples’ decide to part ways during the process. Please note that I am in no way claiming to be nor am I qualified as a marriage/relationship counsellor, however, we are often treated this way as clients confide in us.
As Personal Insolvency Practitioners we take pride in being able to help those struggling with unmanageable debt gain relief from the collections pressures and legal actions.
Ironically, if the relationship breaks down after a debt solution is put in place it can often mean a new financial struggle as each person struggles to cope on a single income, set up home on their own, possibly make child support contributions, etc.
So what is the answer?
My advice is communication is best – and the earlier the better, although… better late than never is also true. Whilst our core business is based in Insolvency, we would much rather that there wasn’t even a need for our services. If you feel that debt is becoming unmanageable your FIRST call should be to your Creditors; discuss with them how your situation has changed and why things are harder to manage. Many borrowers are completely unaware that every single Creditor is required to have a Hardship department and policy – this means there is a whole team dedicated to assessing and implementing ‘hardship provisions’ to assist customers on a short term basis, usually around 3 months. Each lender will have their own criteria as to what qualifies as hardship, although it is reasonable that unemployment, redundancy or significant illness would be amongst the most common scenarios.
If hardship relief is not accessible, at the very least, you have put it on record that you requested help and this will be noted by anyone working in Collections prior to calling you.
Other options include loan consolidation or refinancing, meeting with a Financial Counsellor, consider a budget management service or a debt management and restructuring service, like Life After Debt ®. Our team will provide you with a sympathetic and non-judgemental overview of your options which may include an Informal Arrangement, a Part IX Debt Agreement or a recommendation to consider Bankruptcy. Click here to contact us and arrange a free initial assessment.
Don’t ignore the problem. Ask for help. Your relationship is too important to put under unnecessary strain and you will be relieved to know what your debt solution options are.
Life After Debt® can provide a free, no obligation assessment of your circumstances and available options; One option Life After Debt specialises in is called a Part IX Debt Agreement. This is a means to freeze the interest and combine all unsecured debt into one manageable repayment via a negotiation with your Creditors. There are eligibility criteria, however the team at Life After Debt® can provide guidance on whether you qualify and if this option is appropriate for you. If you are simply unable to repay your debts, and you believe this will be unchanged for some time, you may wish to consider your options under Bankruptcy. https://www.afsa.gov.au/insolvency/i-cant-pay-my-debts