Journey out of unmanageable debt
David’s story*
The circumstances
David was a franchise owner however his business was severely impacted by the Global Financial Crisis and never fully recovered. The franchisor repossessed the business along with the assets, leaving him owing a large unmanageable debt to the franchisor, plus credit card debts, business guarantor debts and the shortfall debt remaining on a repossessed car loan.
Due to the failing franchise business, David also lost his home whilst trying to juggle the mounting unmanageable debts.
The problem
David’s unsecured debts were unmanageable and totalled $90,596. On a combined household income of $88,787.92 David and his wife estimated it would take them the rest of their working lives to pay off their debts.
David considered bankruptcy as he could see no way out, however his employment would have been adversely affected by declaring bankruptcy. On his income, he would have been over the threshold and would still have to make financial contributions to the bankruptcy.
Here’s a snapshot of David’s outstanding loans:
DAVID’S DEBTS
| Description | Balance | Min. Monthly Repayment |
| Franchisor | $39,681.00 | $stopped paying |
| Accounting Fees | $1,437.00 | $stopped paying |
| Credit Card #1 | $5,884.00 | $80.00 |
| Credit card #2 | $15,859.00 | $480.00 |
| Credit Card #3 | $23,447.00 | $500.00 |
| Defaulted Car Loan | $4,288.00 | $stopped paying |
| Total | $90,596.00 | $1060.00 + the debts he had stopped paying |
The fix
Luckily, David was referred to Safe Debt Management by a bankruptcy trustee. Because David’s income and liabilities met the required thresholds, Safe Debt Management was able to assist with a Debt Agreement. A Debt Agreement is a formal arrangement between David and his creditors.
David’s Debt Agreement resulted in very low and affordable payments of just $100 per week. Under the agreement accepted by his creditors he will only pay back 29.7% of his debts to them. David will be free of these debts in 2023. At the end of this period, the remaining balance of these debts will be extinguished and he will no longer owe them money.
David has been able to keep his employment, can now afford the repayments on his second car loan, and will clear all his debts in 7 years by paying just $27,335.00 to his creditors.
To take the first step out of unmanageable debt – contact us today for a FREE debt assessment.
*David’s identity and case details have been altered to protect his privacy. This information and calculations are for illustrative purposes only but reflect actual cases.