Have you found yourself in debt? Here are your first steps.
Fran Hughes, CFP
Enjoying mini-retirement | Finance Coach to Executives, Professionals and Business Owners | Keynote Speaker | Media Contributor | Female Financial Wellbeing Advocate | FSPower50 Australia's Most Influential Advisers
Nearly two-thirds of working Australians hold debt besides a home loan, according to new research from ING Bank.
Sometimes debt is okay. If you have a loan for your home and you make every payment on time, that’s great! But if you have multiple loans or your circumstances change, or you have numerous bills to pay at the same time, owing money can become a big problem.
So first of all... What should you do if you find yourself juggling too much debt and can’t make the payments?
1. Contact your provider: Don’t hold off on contacting your loan provider/utility company etc. If you get onto it EARLY, they may be able to help you with a payment plan or delay the due date.
2. Speak with a financial professional: A financial professional will help you to understand your options, rights and responsibilities, potential legal legal action and more.
3. Apply for hardship: Health problems, unemployment and particular circumstances allow you to apply for hardship payment variations. You may even be able to access your superannuation to service debts.
What happens when you don’t pay money you owe?
1. Debt recovery: Your debt may be passed onto a debt collection agency who will contact you to recover the outstanding money. There are strict guidelines in place for debt collectors. If you feel intimidated or threatened, you can report them to The Australian Financial Complaints Authority.
2. Credit score: If your debt is outstanding after 60 days, it can go on your credit history for 5-7 years. This will make it much harder to borrow money or set up accounts with some utility providers.
3. Repossession: If the loan is for an asset like your home or car, the lender may repossess it. Prior to repossession you would receive a default notice and receive 30 days from the date of issue to make the outstanding payment.
Do you need help putting a plan together to tackle debts? Financial stress can have a large impact on our physical, mental and emotional wellbeing as well as our relationships and productivity.
If you need help, please feel free to get in touch.
Finance Broker. MFAA Chair. Proud supporter of Foodbank WA.
4 年Fran, this is something I work with my client on. Reducing debts so they can just focus on one repayment. There are so many ways we can help people get control of their finances!