Write off your debts, not yourself!

If you are in debt the most important thing is that you don’t bury your head in the sand and pretend it doesn’t exist - it isn’t going to go away if you don’t make it! 

Coming to terms with your debts can be difficult – many people say how whakama they feel when talking about their finances – but as hard as it is and no matter how bad your situation is help is available. 

Write your debt off not yourself – today can be a new day.

Help with the unexpected 

No Asset Procedure 

Losing your money to whānau


Here are some steps you can take for saying goodbye to bad debt.

Work out what you owe. The first step is to sit down and work out exactly how much you owe and then work out a budget for paying the bills. Paying for the essentials is non-negotiable – you need to make sure that you have adequate shelter and food. Pay the priority bills first – mortgage or rent and power. If you do not have enough to pay for these essentials: 
  • Talk to your creditors to negotiate a payment that you can afford. 
  • You may be eligible for help from the government. This is not a long-term solution but may be able to help you to pay your essentials in the short term. 
  • If you can’t afford to put food on the table or clothes on the tamariki there are agencies that can help you get through during a difficult financial period. To find out more click here.
  • If paying for your essentials is an on-going problem you need to look at ways that you can save on these essentials – link here. 
Stop digging! Cut out all non-essentials – movies, magazines and stop using hire purchases, credit cards and loan sharks as a short-term solution. Now is a very good time to look at what you might be spending money on coffee or cigarettes per day for example as these can be a massive weekly cost! 

Prioritise your debts. Work out how much you can afford to pay each week on your credit card and any other additional debt you have managed to accumulate. If what you have is not enough to cover the minimum payment on these debts, the best thing you can do is go to your creditors and come to an arrangement based on what you can afford. If you can meet the minimum repayments on your debts think carefully about which debt to prioritise paying off. Try arranging your debts in order of how much interest you are being charged.

For example: 
Amount owed
Interest rate
Credit card A $4000 24.9%
Credit card B $6000 21%
Hire purchase $15,000 17.5%
Personal Loan  $5000 14%

In this example, it makes the most sense to put as much as you can towards paying off Credit Card A first as you are being charged the most interest on it. Once you have repaid this debt attack the next one. However, it is very important that you are still meeting the minimum repayments on your other debts as if you fail to meet these you can incur other costs. 

Look for ways you can find more money to throw at your debts: 
  • Look for some extra work until you are on top of your extra debt. 
  • Find ways to cut down your fixed costs. For tips click here: link to minimise your fixed costs.
  • Sell what you don’t need – getting rid of unwanted items is a good way to make some extra cash. Sell it online on Trademe or try having a garage sale. 
  • Negotiate overtime with your employer. 

More debt than you can handle. If you believe that your debt situation is such that your debts outweigh your assets and your income level makes paying these debts off unrealistic, there are other options such as summary instalments, no asset procedures and bankruptcy. These options should not be taken lightly, but can be a way for you to put your past behind you if you are in a serious financial position. For more information click here 

Kanohi ki te kanohi. If you need to talk to someone face to face about your financial issues there are a number of free budgeting services that can help you.