How to Identify Financial Stress?
More than 2.5 million Australians (13% of the national population) live in financial stress. There are many reasons why people find themselves experiencing financial stress and unable to make debt repayments, including loss of employment, being unable to get full-time work, the death of a loved one (and associated loss of income), divorce or separation, a traumatic event that impacts your ability to work (eg. health taking a turn for the worse), a sudden increase in the cost of living, interest spiralling out of control, having a baby, being taken to court for a substantial amount of money, and even having an investment go bad. However, what causes one person to experience financial stress may not impact another person as severely.
Worrying about your finances is not uncommon. However, it is important to seek help if you feel that there is no "light at the end of the tunnel." Financial stress can affect your mental, emotional and physical health, and even your relationships.
Get advice from our professional debt negotiators to decrease your financial stress.
Warning signs of financial stress include (but are not limited to):
- Not having sufficient income to cover your expenses or debt repayments and feelings of guilt about spending money on non-essential items.
- Fear of being evicted from your home because of rent or loan arrears.
- Receiving notice of legal action or debt collection.
- Debt and interest on loans and credit cards are spiralling out of control.
- Struggling to provide the basic necessities for yourself or your family.
- Fighting about money with those close to you, or withdrawing from social activity altogether.
- Symptoms such as constant worrying and thinking about money, low energy, fatigue, headaches, trouble breathing, chest tightness, difficulty sleeping, mood swings, loss of appetite, constant nausea, thoughts of self-harm or suicide, and increased use of substances to cope.
How does debt rescue work, and who is the best person to get in touch with about debt assistance?
If you have reached the point of reading this article, we assume a high chance you have done all you can do on your own. If that is the case, we commend you for taking personal action and getting this far! There is absolutely no shame in seeking debt help! However, it is important to tackle both the root cause of financial stress and the symptoms – because it can take quite some time to recover financially, and we want to make sure to look after yourself during this sensitive time. It is more than okay to reach out for help because going through debt and financial stress is never fun – but the experience can be more bearable when you are being supported.
Talk to your GP or another trusted health professional to help point you in the right direction and create a plan of action to manage your mental, emotional, or physical health issues. See below a list of free services that you may contact if you cannot wait to make an appointment or just want someone to talk to:
-Lifeline – For suicide help, call 13 11 14
-Beyond Blue – For help with depression and anxiety, call 1300 224 636
-MensLine Australia – For Men's help call 1300 789 978
-White Ribbon Australia – For Women's help, call 1800 737 732
Just as it is essential to seek help for your health, it is important to seek professional assistance if you are struggling financially. Remember, you do have options. You may ask yourself: "Financial counsellors, financial advisors, financial debt counsellors, financial debt advisors… there are so many different types of advisors out there! Who is the right person to speak to?". We suggest speaking to a free financial counsellor who can conduct a debt review and discuss your options in a non-judgemental way. Get in touch with your creditors (those to whom you owe money) and ask what provisions can be made given your financial circumstances. For example, you may be able to make smaller debt repayments, apply for hardship, or offer a lump sum to settle the balance and write off the debt's remainder.
What are other debt rescue options available?
Debt consolidation or debt relief loan entails taking out a single loan to pay off many others such as credit cards and personal loans. Instead of paying off multiple debts to various creditors, debt consolidation effectively combines these debts into one loan, one lender, and one interest rate. However, note that you will still be liable for the full amount of the total combined sum of your debts. To obtain this kind of finance, your lender will also have to conduct a credit check to assess your capacity to service the ongoing debt repayments – therefore, this option may not be suitable for those with an impaired credit rating, or if it will take "forever" to pay off the debt.
Alternatively, you can consider a debt agreement, which does not depend on your credit rating (that is, having a bad credit rating will not stop you from being able to enter into a debt agreement). In a debt agreement, it can be negotiated that only a portion of the total debt is required to be repaid, and interest, fees, and charges may be placed on hold for a set period of time. Debt agreements also offer a solution to those who are legitimately struggling to keep up with their financial obligations. Do note that entering into a debt agreement is considered an 'act of bankruptcy', your credit will be impacted for up to five years, and there will be a notation listed on the NPII, but the good news is that you will be allowed to keep your assets.
There are many debt rescue solutions available in Australia. If you'd like to assess your options or simply require more information, free call us on 1300 003 328. Our friendly Credit Counsellors are more than happy to help you assess your options and find a debt solution based on your unique financial situation. Our team has heard thousands of people's stories of financial stress, so you can be assured that the voice on the other end of the phone will understand what you are going through and will be able to assist without judgment.
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