How bad debt can be good for mental health.

More and more New Zealanders are struggling with mental health.

A Statistics NZ survey showed a significant increase in the percentage of New Zealanders with poor mental health, up from 22% in 2018 to 28% in 2022. And according to a 2023 government briefing paper, psychological distress has doubled since 2014.

It’s probably fair to say that the ailing economy is now playing a significant role when it comes to the continuing erosion of New Zealander’s psychological wellbeing.

The facts around child poverty are also incredibly concerning.

One in five children lived in households where food ran out often or sometimes in the 12 months prior to the 2022 / 23 survey, an increase from the previous two years (14.4% in 2021 / 22 and 14.9% in 2020 / 21).

More than one in three Māori and Pacific children were living in households where food ran out often or sometimes in the year prior to the 2022 / 2023 survey, compared to nearly one in six European kids and one in eight Asian children.

The high cost of living means money’s tight, with many families struggling to put food on the table.

So, it’s no surprise that anxiety and stress are rising as fast as unpaid bills.

One of our recent articles revealed how almost a half a million New Zealanders are behind in paying their bills, a 7-year high in missed payments.

Which probably makes you wonder at our headline.

How on earth can asking for money that people are already struggling to repay, help stress levels?

Well, we know that having unpaid bills adds up in terms of a growing, gnawing anxiety.

And that financial worries can create sleep disorders while increasing susceptibility to disease and risky behaviours like gambling or drug addiction.

We also know that 99% of people who find themselves unable to service a debt want to repay what they owe.

Ignoring it doesn’t help, it just festers and adds to anxiety and unhappiness.

Instead, confronting the debt but in an non-confrontational way, does.

And it’s here where good can come from the way bad debt is managed.

Because debt recovery can be a force for lasting, positive change.

You just need the right approach.

That means showing real empathy for the situation, understanding why someone suddenly can’t service the debt, then creating a flexible, long-term repayment plan that the customer feels comfortable with and can realistically meet.

We never compound the problem by adding more misery with collection fees either.

A tactic which sometimes make paying off the amount an almost impossible task as the debt becomes much larger than the original sum.

The fact is that sorting unpaid debt takes a huge weight off people’s minds.

Especially when they know the amount they agree to is not going to stop them feeding their family, pay for schoolbooks and play their part as a valuable contributor to the community.

They regain financial control, financial confidence and a lot of mana from knowing they’ve done the right thing in a way that’s fair.

New Zealand’s growing bad debt is affecting more and more people, from all walks of life.

So, for organisations who want to make a positive impact in the lives of Kiwis, which is probably most businesses, recovering bad debt with a human-centric approach helps keep the economy and New Zealanders healthier.

While receiving financial certainty and goodwill along the way.

Because not only do we pay our clients a percentage for debts that might otherwise be lost, their reputation is enhanced as one who cares not just about how well their balance sheet looks but how well their customers and New Zealand communities are doing too.

And these aren’t just fine words.

Because in the fine print, we can demonstrate a dollar value in terms of positive social outcomes that our more socially responsible approach results in.

Together with the clients we partner with, this approach reduces mental trauma and harmful behaviours while increasing economic inclusion, feelings of self-worth and financial acumen.

To the social value of over $115 million dollars in the 2022 / 2023 financial year.

Winter is coming.

Power bills will be higher, warm clothes will be needed for growing kids.

But with a people-first approach to debt recovery, through fair and empathetic repayment plans, we can brighten the lives of the mostly ordinary, hard-working kiwis who just need a guiding hand to help them repay what they owe with dignity and respect.

We’re in the business of making positive transformations in the lives and wellbeing of New Zealanders.

Can we count your company in?