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On solid ground after financial turbulence

Unemployment, an ailing business and multiple loans sent this couple into a financial tailspin. They sought help from Better Place Australia’s Financial Counsellor.

My partner, Leon, and I were in dire financial straits. Not only were we deep in debt but we were also facing the threat of foreclosure and the repossession of our two cars. No matter what we tried, we couldn’t seem to find a way out of our situation.

At the time, I was running a small business that had been suffering losses for the past five years. Leon meanwhile was recovering from a work-related injury that had left him with high medical bills and impending unemployment.

I was desperate to keep my business afloat since it would likely soon be our only source of income. I had applied for three loans in the past five years through unsolicited offers and was using each one to pay off the other. My “financial strategy” had created a vicious cycle.

When our funds began drying up, I approached the bank to ask for consolidation but I was refused on the basis that my loans were “irresponsible lending.” Instead the bank suggested and approved fourth loan. I seized what I thought was a lifeline.

As it happened with my previous loans, I was soon struggling to make payments on this fourth loan too. I turned to the bank for financial hardship support but my application was rejected. Soon after that, I received a legal notice from them.

Our financial situation worsened and I felt myself on a downward spiral. We were exhausted, afraid and overwhelmed. That’s when I decided to seek help. By the time I approached Better Place Australia, our debts totalled $80,000 – including a mortgage.

The first thing our financial counsellor did was collect all the facts from us. I felt shame telling her our story but I never felt judged by her. Neither did Leon. This really helped establish trust in our financial counsellor and in the process.

Our financial counsellor then identified maladministration on the bank’s part and immediately began negotiations to address the matter. She discussed with us legal remedies and expenditure, and helped us create a sustainable budget that would get us back on our feet.

She also outlined a few tactics to help us take back control of our finances and explained the possible outcomes of each one. We had so much guidance and support to develop our case. I was so grateful for that.

This newfound knowledge and support built my self-confidence to the point that I decided to challenge the bank’s lending practices by taking our case to the Financial Ombudsman Service (FOS). And we won!

The FOS ordered the bank to waive all fees, interest and charges, significantly reduce the principal on the credit card, and consolidate the balance. Our overall debt was reduced from $80,000 to $37,000 and affordable installments were put in place.

Having an independent expert to talk to about our financial and emotional stress was so helpful and comforting. Today we’re better able to tackle our financial issues, make better financial decisions and are equipped to manage our finances.

Our financial counselling experience has given me hope that we will never find ourselves in a financial mess again.

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