Luke’s Story – A Personal Debt Agreement
Luke had a period some years ago where he found himself unemployed and in that time, just to meet his ordinary everyday commitments, he had to use credit cards and some short-term, high interest small loans.
Debts Quickly Start to Mount Up
Quite quickly these debts grew large and even though Luke eventually got a job he then struggled along for 18 months trying to pay back what he had borrowed. With a big mortgage to service the money he had just didn’t stretch far enough. Finding just the minimum monthly repayments was hard and with late payments, default fees and interest being added he really was going nowhere fast.
Creditor Phone Calls Creating More Pain
Luke was under constant harassment from some of these creditors to increase his payments. Eventually he was sued by some of them and then came to us for help.
Luke’s Debts –
|Creditor||Type of Debt||Total Debt||Payments P/M|
|GE Finance||Credit Card||$ 5,419||$142|
|ANZ||Credit Card||$ 9,354||$186|
|Citibank||Credit Card||$ 7,207||$166|
|Credit Corp||Old Loan||$13 ,092||$235|
|Optus||Phone Acct||$ 827||$ 85|
|The New Payment by Debt Agreement||$650|
Debt Agreement reduces Luke’s payments
Luke entered into a Debt Agreement that we arranged with all of his creditors. The creditors agreed to accept $39,000 paid in affordable monthly instalments over five years as full and final settlement of all of these debts (Interest saved est $40,124).
That was $650 per month instead of paying $1,021 per month. The reduced monthly commitment was affordable and meant that Luke didn’t miss a payment. Interest, overdue fees and recovery fees were all frozen.
Financial Turn-around – Light at the end of the tunnel
About two years into the repayments Luke changed to a higher paying job and, although he din’t have to, he chose to increase his repayments to finish the Debt Agreement off early and he was free of debt (other than his mortgage) for the first time in many years.