Unexpected expenses Archives

“Had I contacted Way Forward earlier, I’m confident I would not have ended up in hospital”

May 2, 2022/in Stories, News, Unexpected expenses/by Rachel Ryan

How credit cards, BNPL and rising living costs landed Scott’s family in debt

Scott is the sole breadwinner in his family of two kids, one with a disability, and a wife who is studying. The pandemic and a move to the city landed them in financial trouble as Scott could no longer afford his family’s living expenses.

Troublesome rise in living costs

“We moved into the city about 18 months ago from a regional location so our daughter could attend University. There was an immediate increase in living costs, everyday costs alongside a large cost in moving our family,” Scott recalls.

“Even though I budgeted for increased living expenses and rent, and just a little bit extra, it mounted up so quickly that I didn’t have enough income to pay everyday expenses.”

“At the same time, our son reached the age where government support for him ended so we not only lost income that we used every week to pay groceries and rent, but on top of that, there was an increase in expenses.”

The situation deteriorated as Scott took on a range of credit cards and loans to make ends meet, “I started off with small personal loans and when that amount was exhausted, I got one credit card and then another credit card to pay off that credit card and so forth.”

“What accelerated the personal and psychological pressure was signing up for Buy Now Pay Later (BNPL) schemes. It seemed a very good idea at that time, we could pay for groceries or put everyday expenses on gift cards, and then pay them off in regular payments fortnightly or monthly over a short period of time.”

“But once there was a number BNPL payments running on top of all other expenses, there was no way I could keep up. It all snowballed quickly to a stage where I had no idea how I was going to make the payments just on the credit cards and still pay school fees and other family expenses.”

“The hardest part was having no idea what to do next or where to go to for assistance. I felt helpless, constantly catastrophising the situation, uncertain what was going to happen next and fearing our family would end up on the street.”

Scott’s way forward

Scott’s financial situation caused him depression resulting in him being admitted to hospital. At the time, he spoke with social workers who recommended several debt consolidation companies with large fees attached, which Scott could not afford so he searched for alternatives.

“I discovered Way Forward when I googled free services to help me get out of debt. When I found the organisation, I was hopeful there was a way out of my situation but I was still nervous that I’ve got in such trouble so quickly that nobody’s going to be able to help. But I thought it can’t hurt to make a phone call.”

Scott got in touch with Way Forward to find a solution to his +$40,000 of debts. Since then, the team renegotiated with his creditors to get him on a manageable repayment plan.

“From the start, my Hardship Advocate seemed very experienced and knew what she’s talking about. Her primary concern was my wellbeing and how was I doing throughout the whole process, right up until the repayment plan was put into place. With every contact, I felt her focus was to relieve the financial pressure I was under and build a way forward and plan out of debt. It was just amazing.”

When the repayment plan was accepted by Scott’s creditors, Scott and his family celebrated. He is now receiving medical care and excitedly awaits for this new chapter in his family’s life without money worries weighing heavy on their minds.

“Now that I’m repaying my debts in an affordable way, my outlook has dramatically changed. Although this plan will last for several years, it’s completely affordable so it doesn’t further impact my family.”

“As long as I stick to my budget and repayment plan, there’ll be money for school fees next year and I won’t have to sit and think where to get this money from. Now I don’t have a dread of the future financially, which is a welcome change.”

For others experiencing debt stress, Scott has this advice, “If you’re struggling with debt, don’t hesitate to contact Way Forward. I didn’t ask for help early enough as I was stubborn and felt there must be a way to fix it all on my own. But had I contacted Way Forward earlier, weeks before I did, I’m confident I would not have ended up in hospital.”

Get help to get out of credit card debt

Way Forward supports 800+ Australians experiencing financial hardship and currently manages debt tied to 2,600+ credit cards on behalf of our clients, amounting to $20M. The average debt for each individual credit card is $9,900*.

Our Hardship Advocates have recently seen a rise in Australians taking on credit cards and BNPL loans to afford everyday items like food, petrol and nappies – landing them in debt they cannot manage and with Way Forward.

If you or someone you know is struggling to make ends meet, ask for help early and avoid taking more credit as it can land you in further hardship.

Contact our team on 1300 045 502 or on our website to see if we can help. Also see our page on emergency services and funding options.

*) Source: Way Forward, March & April 2022

“Don’t do what I did. Just pick up the phone and see if Way Forward can help.”

August 23, 2021/in Stories, Child support/Maternity, News, Unexpected expenses, Separation/Divorce, Family dispute/by Rachel Ryan

Following a marriage breakdown, relocation and a new job, Sarah found herself losing sleep over unmanageable debt with only costly ways out. When the stress over finances started to affect her relationships with loved ones, such as her young daughter, she knew she had to ask for help. Now, Sarah wishes she’d done it sooner.

“I had a good situation, nice place, nice car, overseas travel, everything going well, I was in a happy relationship. Things changed after falling pregnant and the relationship continued to deteriorate after having our daughter. So a family breakdown led to my current set of circumstances. And that’s been exacerbated over time with family law processes and basically, having to start again.”

Despite working, family expenses and costly emergencies made Sarah turn to credit cards and personal loans, which quickly ballooned into a problem.

“When I was unable to repay my debts, my solution was to find a consolidation loan to reduce the repayments and a cheaper rate. I spent many sleepless nights looking and applying for consolidation loans to try and move forward. I halved my credit rating in the process, which was devastating.”

“I was told I didn’t have enough income for a consolidation loan, although it would be a lower repayment than what I was currently paying. That’s when I started to look at alternatives.”

“I contacted numerous organisations and many called me back to say I should go bankrupt in one form or another. Being a single parent that wasn’t really an option.”

When Sarah met Bill

Following endless nights of research, Sarah finally got in touch with Bill, one of Way Forward’s financial hardship advisors.

“I was very fortunate to find Bill who reassured me that with Way Forward, it was a different process. One where I’m still honoring my creditors, which meant a lot to me because I’ve always paid my debt. I’m particularly proud of being in that situation now.”

Putting together a realistic debt repayment plan with enough left over to manage Sarah’s living expenses brought instant relief.

“The process of putting a repayment plan and budget together was easy and simple. Bill was really understanding and he worked with me to find a solution. And it wasn’t just lip service. It was backed by a real, long-term solution to start managing my debts.”

“It is a huge relief, being able to sleep again, not stressing out, not staying up all night, not losing time with my child over the anxiety of dealing with this. I don’t have any regrets about the process with Way Forward, whereas every other option would have left me in a worse position.”

“I knew it was a matter of time before I find a solution where everyone wins. I just wish I would have picked up the phone and contacted Way Forward sooner.”

Ask for help

For others in a similar situation, Sarah’s advice is clear: you’re not failing if you ask for help.

“When I got to the point where I knew I had to call for help, I had this feeling I failed and that I shouldn’t be in this position. So then to have someone like Bill on the other end, who made me feel good, was a huge relief. He wasn’t trying to get me into a worse position or wasn’t trying to sell me some ridiculously expensive solution. He was genuinely trying to help.”

“So don’t feel like you’re failing by picking up the phone and calling. You won’t regret it, you’ll get your life back. And you’ll have a true solution put in place where everyone wins.”

“And that’s one of the things Bill said that made me feel better. The banks and creditors are still getting something back rather than nothing. It made me feel so much better knowing those debts are still being repaid but at an affordable rate for me.”

More time for what matters

Now Sarah has more time for the things that really matter in her life such as her job supporting vulnerable people and spending time with her daughter – while getting through home schooling during lockdown.

“I realised yesterday that I was really enjoying our time together again with my daughter. And I thought, I’ve been a little bit absent, not being able to connect as much because I’m always concerned about this underlying issue. And she’s felt that as well.”

“So the biggest thing for me is not having those barriers to connect with the people you love and care about, which is what it’s all about anyway, because of the stress over finances.”

If you’re stuck, get help early. Pick up the phone and ask for support. Find out if Way Forward can help you.

Struggling to pay for the essentials such as food and rent and want to know more about your options? Our emergency funding page lists some of the available free emergency services and funding if you live in Australia and find yourself in financial difficulty.

At one time he had to borrow food to eat – Steve’s story of perseverance

May 26, 2020/in Unexpected expenses, Illness or disability/by Rachel Ryan

“We were in a no-win situation; we were going bankrupt. Now, everyone gets quite a good outcome out of this.”

When Steve was referred to Way Forward by NAB for financial assistance, he describes himself as being in “a really bad place.”

He was in a big accident a few years ago where he broke his neck. He was out of work for two years. This is when some of the financial problems began.

“I didn’t have money to go look for professional help, without you guys, we would have starring down bankruptcy. I had some pretty dark days and pretty bad thoughts.”

“We were at that stage where we were borrowing food off friends or eating at friends’ places to survive.”

Steve was the sole breadwinner of his family. His partner was injured. He felt a huge amount of pressure to provide when they were already in too much debt, which could not be paid off.

Way Forward negotiated with the banks on Steve’s behalf to have the debts and interest decreased. The debts were consolidated so that payments regularly were withdrawn from one account.

“We feel like we are doing the right thing rather than going bankrupt where everybody loses out. We feel like this is a good, honest way to get out the situation we were in.”

Steve was stressed from the constant phone calls from the banks. He was receiving up to 3 calls per hour from the banks, sometimes on the weekends.

After Way Forward started managing the relationship with the creditors and banks, the phone calls stopped almost immediately.

“It was huge relief.”

Way Forward’s Client Service’s Manager Melanie worked with Steve to organise a realistic budget.

“We were trying to cut ourselves to an absolute minimum and we would have gotten ourselves into trouble again.”

Steve’s initial reaction to Way Forward’s funding arrangement has changed over time.

“When I found out that the major banks were funding Way Forward, I was skeptical that you would be on our side. But you genuinely seemed to be on both sides. You want the best for the people who are providing for you guys, but you also want the best outcome for the people that you help.

We were in a no-win situation, the banks would have gotten very little out of it, we were going bankrupt. Everyone gets quite a good outcome out of this.”

If you’d like to know more about how Way Forward can help you:

Enquire here or call us on 1300 451 343

Use our free budget planner or repayment calculator.