Dealing with out of control debt
Felicity’s story*
The circumstances
Felicity’s problems with out of control debt began after the end of her 15 year marriage in late 2014. During her marriage, she had little input into the financial management of the household and managing budgets.
The problem
Following her marriage breakup, Felicity decided to relocate for a new job and new start on life, but this also meant she incurred relocation expenses, which added to the pressure of having only the one income. She found herself living beyond her means and eventually found herself completely over-committed with out of control debt and unable to meet her repayments.
Felicity had creditors constantly chasing her for payments. Her life and debts were out of control and she was unable to bring her accounts up to date. She was stressed and felt there was no other way to pay back all of her debts without expert help. Here’s a snapshot of her outstanding loans:
| Description | Balance | Min. Monthly Repayment |
| Credit Card | $7,354.00 | $149.89 |
| Personal Loan | $1,152.00 | $193.84 |
| Credit card | $15,304.00 | $614.00 |
| Personal Loan | $3,844.00 | $251.68 |
| Personal Loan | $3,359.72 | $142.98 |
| Personal Loan | $5,500.00 | $Not paying |
| Personal Loan | $1,500.00 | $Not paying |
| Credit Card | $12,860.00 | $245.45 |
| Ex Rental Arrears | $2,434.00 | $400.00 |
| Credit Card | $18,466.60 | $448.77 |
| Total | $71,774.32 | $2,446.61 |
The fix
Because Felicity’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 Felicity and her creditors.
Prior to taking out a debt agreement Felicity’s repayments were $2,312.39 each month. She was making payments to 8 creditors, however she was not paying the other 2 creditors (total 10) as she simply did not have the funds.
She now makes one affordable payment to Safe Debt Management each week, rather than individual payments to multiple creditors. As the debt administrator, Safe Debt Management pays Felicity’s creditors on her behalf, so the stress of having creditors chasing her for payments is eliminated!
Felicity’s repayments under a Debt Agreement vary due to rental debt payments but will average $204.36 per week over 6 years to clear her unsecured debts.
The creditors forgo interest on Felicity’s unsecured debt and accepted $45,269.60 of the total debt $71,774.32 owed, or 61c in the dollar as full and final settlement of her debt.
With a Debt Agreement, Felicity was able to gain back control of her finances. At the end of 6 years, she will be debt free!
Take action and deal with out-of-control debt – contact us today for a FREE debt assessment.
*Felicity’s identity and case details have been altered to protect her privacy. This information and calculations are for illustrative purposes only but reflect actual cases.