Debt Specialists Collaborating To Reduce New Zealanders’ Personal Debt
The Debtfix crew launched with a positive start to 2021, initiating a collaborative hui at Warkworth with major stakeholders who work to reduce New Zealanders’ personal debt.
Debtfix co-founder, Christine Liggins invited the groups to Warkworth to share knowledge and improve delegates’ understanding of the debt solutions each organisation offers.
“The more we know about one another, the better the outcomes for people who are struggling financially,” she says.
“We can all refer people to the best organisation and when it seems like there may not be any hope for a person’s debt problems – we know another provider may have a service that will help them.”
Representatives from FinCap and the Ministry of Social Development joined Debtfix and Christians Against Poverty – both recently approved for government funding to strengthen existing debt solution services.
Mrs Liggins outlined Shipshape, a new debt solution like some used overseas but it has been co-designed by Debtfix and primary lenders with a unique New Zealand structure that has client well-being at its heart.
Shipshape is in its pilot phase and Debtfix envisages lenders will support it because it will improve the amount of debt they recover in contrast to returns achieved by debt collectors.
Delegates from Ngā Tāngata Microfinance and Good Loans facilitated discussions about challenges New Zealanders encounter when living on low incomes.
These charitable lenders provide fair and affordable, no and low interest loans to get people out of high interest debt and on track to improved financial well-being.
Linda McCallum from Ngā Tāngata described an anecdotal situation of a person taking a high interest loan to buy an old car, which invariably breaks down.
They borrow more money for the repairs and become trapped in a debt cycle with a costly and unreliable vehicle that could hinder their earning ability.
Political representatives were invited and Chris Penk, National Party MP for Kaipara ki Mahurangi attended.
He says he was humbled by the stories from the high calibre people working to improve the lives of vulnerable New Zealanders – motivated simply by aroha and kindness.
He noted the insolvency law reforms that were discussed during the hui and plans to research them further.
The Ministry of Innovation Business and Employment has pushed out the next round of proposed law changes needed to make lenders more responsible from April to October 1, 2021.
The proposed changes will give borrowers greater protection, prevent them from being confused and give the Commerce Commission greater power to keep high interest lenders inline.
Mr Penk says he was aware of some of the issues facing New Zealanders with high levels of personal debt, but the hui revealed how quickly problems can snowball for people with a low income.
All Debtfix staff members attended and Mrs Liggins says the positive feedback has encouraged her to arrange on-going collaborative hui.