Bad advice left family desperate (Copy)

Numerous factors put a Kiwi family that had always done well, into a dire financial situation that made them feel like failures. They were desperate until they found Debtfix.

Poor advice about drawing down on Kiwisaver and borrowing to build a family home impacted on Lisa and her partner’s ability to repay a mortgage that was always beyond their budget.

We’ve changed the name of this Debtfix client to protect their privacy, so this is Lisa’s story.

“We were over-committed and then I lost my job. It was horrible – horrible,” says Lisa.

Extended family had supported the couple by becoming guarantors for the mortgage, but this left them financially hamstrung and the complex situation was dragging everyone under. Lisa says they kept thinking things would get better and they took small payday loans to just get them through a weekend but then, a $200 loan ballooned to $600 that they could not repay. The high-interest loans to pay off loans were approved, even though they didn’t meet the lending criteria, but the couple was desperate and it was an easy option.

Eventually, it became clear they needed to do something drastic to sort out their money problems.

“We had to sell our home and had to make a hardship application to cover the cost of selling. We were left with less than $10 from the proceeds and we still had lots of debt.”

The strain of their financial situation, scratching around just to find money for milk, impacted on the mental well-being of everyone.

“I felt like we were at rock bottom and my confidence was shot. It put a massive strain on our relationship and family.”

The couple had always worked hard and done well but when the tide turned, Lisa was forced to go to foodbanks and their extended family also helped them. Going to foodbanks was daunting for Lisa and she felt like a failure. However, the people were supportive and she has complete respect for the organisations. The couple were on the verge of going bankrupt, but it wasn’t an ideal option because this action would have affected Lisa’s partner who had a shareholding in a business.

When there seemed like there was no solution, they discovered Debtfix through Citizens Advice Bureau, which had just completed training with Christine Liggins.

They opted for a Creditors Proposal which allows the couple to make repayments based on what they can afford.

“Contact with Debtfix has been amazing. They looked at our budget and factored in everything – even haircuts and then, set up the payment amount. I have full trust in Debtfix.”

Lisa has worked in three part-time jobs that gave her the flexibility to meet parenting commitments and then Covid hit – making life harder. She lost her hospitality job and when she let Debtfix know, they came up with another solution to meet her creditors proposal payments.

“Sometimes we can see the light at the end of the tunnel and sometimes not, but this is part of a five-year plan and we didn’t want to walk away from our debts. Everyone will be paid,” Lisa says. “Now we are under Debtfix’s umbrella, we have our own account manager, and it suits us perfectly. Debtfix should definitely be more widely known.”