Dealing with out-of-control debt
Felicity’s story*
The circumstances
Felicity’s struggles with excessive debt began after her 15-year marriage ended. During her marriage, she had little control over the household’s financial management and budgeting.
The problem
Following her marriage breakup, Felicity decided to relocate for a new job and a new start in life, but this also meant she incurred relocation expenses, which added to the pressure of having only 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 repay 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
Due to Felicity’s income and liabilities meeting the necessary thresholds, Safe Debt Management was able to assist her with a Debt Agreement. A Debt Agreement is a formal arrangement between Felicity and her creditors.
Before entering into the debt agreement, Felicity’s monthly repayments totalled $2,312.39. She was making payments to eight creditors, but was unable to pay the other two, resulting in a total of ten creditors.
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, thereby eliminating the stress of having creditors chase her for payments.
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 of $71,774.32 owed, or 0.61 cents in the dollar, as full and final settlement of her debt.
With a Debt Agreement, Felicity regained 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 his privacy. This information and calculations are for illustrative purposes only but reflect actual cases.