Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


$65 million in Overdue Debts

Friday 13-10-2006

Budget Service Clients Present $65 million in Overdue Debts

New clients to the Federation of Family Budgeting Services, over a twelve month period, owed a total of $64,692,741 in overdue payments.

The Federation has recently compiled its annual statistics for the twelve months to 30 June 2006. Their analysis shows the total debt arrears figure, which is a measure of the overdue portion of client debts, has risen by over 14 percent year on year. Taking into account the reduced number of clients over this period, this is a massive average increase in overdue payments of 27 percent per client.

Federation services throughout New Zealand gave in-depth, ongoing advice to 10,733 clients over the twelve months of the reporting period. Their statistics show these clients now have an average of $6,027 worth of outstanding debts. Last year that figure was just $4,736 per client.

Federation President Shirley Woodrow says its little wonder people are in strife.

“We are constantly seeing younger people with higher levels of debt. Some of our budget advisers see contracts where the client can’t even afford the first payment. There is almost an expectation out there now for families to take on more debt.”

The situation is certainly a lot worse than it was a decade ago and some of our longer serving volunteer advisers are throwing their hands up in the air and wondering what can be done about it, she says.

The drastic increase in overdue debts comes at a time when inflation is soaring, the annual inflation rate increased by 4.0 percent over the same period. Federation Chief Executive Raewyn Fox says higher petrol, food and accommodation costs put the squeeze on families already living on tight budgets.

“The increases in the cost of living are really making a difference. It’s the basics that are pushing people over the edge now. Petrol, in particular, is making it real tough for some families; especially for those in rural areas.”

As Federation clients are less likely to own their own homes the debt arrears they present are predominantly from credit contracts, credit cards, personal loans and government debt and fines. Unfortunately, these forms of debt usually come with hefty interest rates and are compounded by overdue payment fees.

The ease of access to credit, along with the lack of rigorous lending criteria from some finance companies, is not just having a major impact on the economy but is also creating more complex client cases and this is why debt crisis is becoming much more common in New Zealand, says Mrs. Fox.

“The complexity of credit contracts, and juggling multiple debts, which some finance companies do not have robust enough systems to check for, is increasing the complexity of many cases our advisers deal with. Of course, if clients come to a budget service before they get into financial trouble, the cases are much more easily managed.”

She urges people to take their credit contracts to a Federation trained adviser to analyse before they sign them. This expert advice is free to the public and could save clients a lot of time and expense later on, she says.

--ENDS--

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

I Sing The Highway Electric: Charge Net NZ To Connect New Zealand

BMW is turning Middle Earth electric after today announcing a substantial contribution to the charging network Charge Net NZ. This landmark partnership will enable Kiwis to drive their electric vehicles (EVs) right across New Zealand through the installation of a fast charging highway stretching from Kaitaia to Invercargill. More>>

ALSO:

Watch This Space: Mahia Rocket Lab Launch Site Officially Opened

Economic Development Minster Steven Joyce today opened New Zealand’s first orbital launch site, Rocket Lab Launch Complex 1, on the Mahia Peninsula on the North Island’s east coast. More>>

Earlier:

Marketing Rocks!
Ig Nobel Award Winners Assess The Personality Of Rocks

A Massey University marketing lecturer has received the 2016 Ig Nobel Prize for economics for a research project that asked university students to describe the “brand personalities” of three rocks. More>>

ALSO:

Nurofen Promotion: Reckitt Benckiser To Plead Guilty To Misleading Ads

Reckitt Benckiser (New Zealand) intends to plead guilty to charges of misleading consumers over the way it promoted a range of Nurofen products, the Commerce Commission says. More>>

ALSO:

Half A Billion Accounts, Including Xtra: Yahoo Confirms Huge Data Breach

The account information may have included names, email addresses, telephone numbers, dates of birth, hashed passwords (the vast majority with bcrypt) and, in some cases, encrypted or unencrypted security questions and answers. More>>

ALSO:

Rural Branches: Westpac To Close 19 Branches, ANZ Looks At 7

Westpac confirms it will close nineteen branches across the country; ANZ closes its Ngaruawahia branch and is consulting on plans to close six more branches; The bank workers union says many of its members are nervous about their futures and asking ... More>>

Interest Rates: RBNZ's Wheeler Keeps OCR At 2%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2 percent and said more easing will be needed to get inflation back within the target band. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news