Between a rock and a hard place
When debts mount, stress levels rocket. Wesley Mission’s research backs up the real-life experience of counselors…
The clients coming to see Wesley Mission’s financial counsellors feel like their hearts are dragging in the dust, like their brains are scrambled by the huge debts facing them.
“They’re mentally affected, physically affected,” said Fairfield Wesley 
Creditline counsellor Sumayya Chota... "There's domestic discord, there's domestic relationship break-ups. Some of them lose their jobs because they're not able to apply themselves to their work as they should. They stay out of work. They’re constantly off on sick leave. They can't take the harassment of creditors who threaten them over the phone.”
Numbers indicate the desperation the clients must feel: one man had 15 credit cards on which he owed $138,000; he had a mortgage of $283,000, and he had just $62,000 a year with which to pay them, says counsellor Lydia Fournaris who works for Wesley Mission in Sutherland. “I had another client who had 20 credit cards, mostly to buy clothes and shoes,” said Lydia.
Family life falls apart under financial stress. Lydia had a couple come in. “She was screaming, screaming,” Lydia said. “He hadn’t paid any bills because he was overspending. They had four credit cards and two personal loans and an overdraft on their savings account – they owed $70,000 all up and they had no assets except his little bit of superannuation.”
Lydia worked out a gradual plan of debt repayments and a budget that would allow them to live within their means and rid themselves of debt.
“Then she came to see me again, alone, crying. He’s moved out and left her with rent arrears. He’s refusing to pay any of their bills and because they signed for everything together she’s getting all the calls from creditors. I had to explain to her that these are joint debts: if he was refusing to pay she would have to pay. She’s frantic, she’s in chaos. She’s coming to see me, she’s seeing a solicitor, I arranged for her to get Lifeline counselling, she’s seeing DoCS, she’s been diagnosed with depression and she calls me from hospital.”
Every helper is dealing with different faces of the same tragedy and the woman in the centre is spinning hopelessly out of control. Her husband moved out and into a flat next door where he wants more access to their two children or, he had told her, “I’ll put a gun to your head”. The woman has fled to a caravan park with the children.
“I had a client who had about 16, 17 different credit cards, with $300,000 - $400,000 owing on those and on personal loans,” said Sumayya Chota. “He had about four or five shark loans. I thought to myself, ‘Are there any more banks that can give you more?’. I had two full pages of creditor sheets and there were 13 on each sheet.
“With people who take out so much credit, are they mentally aware of what’s happening? Are they forgetting that they had other cards or loans? They do forget when they got all those loans. They forget the balances – there are so many to remember: ‘Who do I have to pay today? Who do I have to pay tomorrow? When is the due date for card number four? When is the due date for loan number 10?.’
“They forget that because there are only 30 days in a month, with this number of credit cards they need 60 days or 70 days a month to be able to reflect and see when they have to pay on each one.
“And these are just credit cards, what about the rental, what about the utilities, what about the telephones – and most clients they get Optus, they don’t pay Optus; they move to Telstra, they don’t pay Telstra; they go to 3, they don’t pay 3. They go to Vodafone, they go to AAPT, they go to Orange – in the end, they have bills owing on all of them.”
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Learn more about managing your finances in our Financial Help section, where you can find an easy to use budget planner, as well as videos and tips from the Wesley Mission Financial Counsellors some of the common problems that can lead to financial stress.
DISCLAIMER: The information provided in this information sheet is of a general nature only, and is not intended to be legal advice. There may be errors or inaccuracies or the information may not be completely up-to-date. Always check the information provided before relying on it. The information relates to consumer law in New South Wales, Australia
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