"I left with nothing and had to start again"Apr 15, 2023
Written by: WayForward
Mother of two, Emily* ended up with a mountain of unmanageable debt after leaving a relationship.
"I left with nothing and had to start again," she said.
As a single parent, Emily’s part-time and casual work didn’t always cover expenses for her and her children.
On top of legal fees to formalise a separation from her partner, she used credit to pay for essentials like clothes, food, petrol, rent and medical bills.
After borrowing $15,000 to pay lawyers, she quickly spiralled.
At one point, she owed $26,000 to creditors.
Once the banks stopped loaning Emily money, so she felt she had no choice but to turn to payday lenders, with interest rates as high as 48 per cent.
"They send you the money quicky and then offer to give you more, which is a trap" she said.
"Eventually, I was looking at bankruptcy."
Then, when she needed to move into a new rental, she did not have enough money to pay for removalists, bond and rent in advance.
By this point, Emily had tried a few different things to get on top of her debts.
She had spoken to a debt consolidation company, but after realising that the company would not guarantee an outcome and could advise she declare bankruptcy, even after she had paid their fees.
Emily also did not want to be advised to declare bankruptcy.
“I didn’t want bankruptcy following me and this also meant I couldn’t pay off the debt and it was important to me that I do that.”
“It was daunting to think of having a bad credit rating for 5 years and that there is not really any way around it.”
“I also tried to pursue a debt consolidation loan with my bank, but they said no.”
After unsuccessfully perusing a few options, she called the National Debt Helpline.
They put her in touch with debt relief charity Way Forward, who negotiated a repayment plan on Emily’s behalf.
Emily describes the call as life changing.
"The sense of dread every fortnight thinking, 'How am I going to find enough to pay for everything?' is gone," she said.
“Previously, creditors were taking money out but now I even having a small amount of savings leftover."
“Recently, a medical bill came up and instead of asking to borrow money from family, I had $1000 in savings to put towards that.”
“I need to upgrade my car soon so I can potentially drive longer distances to a different job, and now I’m considering saving to buy that car rather than borrowing.”
Emily’s advice to other people who are struggling is to think beyond what they know about money and finances, because “when you’re in a debt trap, that’s all you know”.
“There often is a way out, we just don’t know the right people to talk to.”
“Think beyond where you are now, unless you do something active, you won’t get out of it”
If you or someone you know needs assistance with managing their debts, contact Way Forward’s free service on 1300 045 502. For more information, check out their website: www.wayforward.org.au