Relief from crippling debt problems

Karen and Troy’s story*

 

The circumstances

Troy was employed with a good credit history and Karen had stable employment as a teachers aide. Their debt problems started when Karen had to leave work due to sickness in the family and Troy suffered a shoulder injury at footy, which required multiple surgeries over a 14 month period. Karen then fell pregnant which added more pressure to the situation.

During this time, Troy and Karen were unable to work and relied on credit cards to survive. They soon found they could no longer manage the repayments and the stress of crippling debt problems was taking its toll on their growing family. The lowest point for them was when they received a statement saying it would take 108 years to pay off just one of their credit cards at the minimum rate!

 

The problem

Troy and Karen’s debts were unmanageable – they just could not bring their credit card accounts up to date as they just didn’t have the money to pay them off. Troy’s unsecured debts totalled $27,613 and Karen’s unsecured debts totalled $44,814.00. Their combined minimum monthly repayments were a staggering $1955.00 per month, however, together they only had $102.87 left over each week after paying the household living expenses and their secured car loan. The debt was crippling their present and future.

Troy and Karen really wanted to repay their debts and did not want go bankrupt. Here’s a snapshot of their outstanding loan accounts:

 

TROY’S DEBTS

DescriptionBalanceMin. Monthly Repayment
Personal Loan$2,914.00$220.00
Personal Loan$19,052.00$520.00
Credit card$2,606.00$75.00
Credit Card$3,041.00$60.00
Total$27,613.00$875.00

 

KAREN’S DEBTS

DescriptionBalanceMin. Monthly Repayment
Personal Loan$24,381.00$560.00
Credit Card$9,213.00$270.00
Credit card$8,179.00$250.00
Personal loans$3,041.00$60.00
Total$44,814.00$1,080.00

 

The fix

Because Troy and Karen’s income and liabilities met the required thresholds, Safe Debt Management was able to assist both of them with a Debt Agreement each. A Debt Agreement is a formal arrangement between Troy and Karen and their respective creditors.

With a Debt Agreement, Troy and Karen were able to each make one affordable payment to Safe Debt Management each fortnight, rather than individual payments to multiple creditors. As the debt administrator, Safe Debt Management then paid Troy and Karen’s creditors on their behalf, so the stress of having creditors chasing them for payments was removed!

Troy’s Debt Agreement resulted in payments of $151.19 each fortnight for just under 5 years to clear his unsecured debts. In total he would pay only $19,050.00. The creditors forgo interest on Troy’s unsecured debt and accepted $13,743.21 of the $27,613.00 owed, or 50c in the dollar as full and final settlement of his debt.

Karen’s Debt Agreement resulted in payments of $229.70 each fortnight for just over 5 years to clear her unsecured debts. In total she would pay only $30,665.00. The creditors forgo interest on Karen’s unsecured debt and accepted $22,040.99 of the $27,613.00 owed, or 79c in the dollar as full and final settlement of her debt.

With a Debt Agreement, Troy and Karen were able to get their family finances back under control. At the end of 5 years they will be debt free!

 

If you’re seeking relief from crippling debt problems – contact us today for a FREE debt assessment.

 

*Troy and Karen’s identity and case details have been altered to protect their privacy. This information and calculations are for illustrative purposes only but reflect actual cases.