Any Financial Advisors able to give me some advice over email re a Debt Collector?

**mrtwsmum** · 04-07-2012 11:17

I need some advice re a debt collector for debt in Australia.
We are now in NZ.

As I find this collector aggressive I do not want to post details online in a public forum and just want a bit of quick advice how to approach settling this debt.

Or how to approach the whole situation.

**mrtwsmum** · 05-07-2012 09:06

So as noone is replying I guess I need to add more detail. I just have been a bit afraid to as this debt collector is quite intense and searches everything it would appear.

Basically I have CC debt in aussie and we moved to NZ. We struck money issues and I was paying the cc debt in aussie for a couple of years.

We applied for a mortgage and told the mortage broker we wanted to borrow extra to pay aussie debt to get it out of way. Two different mortgage brokers told us not to bother (will be off our records in 5 years etc). Advice shocked me, made me feel a bit sick, but as we were on very low income and struggling to send money back (mortgage cheaper than renting option as rent so ridiculous) to aussie as exchange rate and transfer fees would sock us a few hundred extra per month. But anyway as I was on very low income at time we went with it.

One of our debts got sold to a debt collector who tracked me down in nz. thats fine. I wouldn't mind entering into a debt agreement to pay it back as it wasn't our intention to leave it anyway, it is just how it happened at the time. I am in a better position now but still struggling to pay catch up from when we had ZERO money.

This agent is known for only paying about 5-10% of the total debt. However this agent charges 30% interest on the debt. THey have added $1000 in fees since they took debt over in feb alone. The debt is now $5k. They probably only paid $500 for it if that. (however this is not the point

)They offered a $50/fortnight payment arrangement. Supposing I send $100 aussie back per month that will cost me about $200 nzd including transfer fees. and the worst part at 30% interest I will never even cover interest.

I don't know what to do. I don't know who to ask about what to do. NZ budget advisors are only used to talking about nz debt. Am at a loss.

**happygrl** · 05-07-2012 09:55

I am not a financial advisor but I was a debt collector for 10 years, although I have been out of it for several years now. Information I have may be out of date so please look into it further.

As far as i know any interest charged on a debt is not legally enforceable unless it is charged in accordance with your original contract.

I'd make them an offer to pay the debt in full - say $600 if you think they paid $500. If they agree to a payout make sure you get it in writing before paying any money - there are some shonky collectors around. Try and get them to accept payment in NZ currency and see if they will accept Paypal - make sure they don't say you need to pay fees.

Also make sure you don't pay anything at all if you intend on letting the debt lapse - the 5 years (or is it 7?) goes from the date of the last payment - not the date of debt. That's why debt collectors try and get people to pay even $10-20 saying that the minimal payment will hold off legal action etc. even after the 7 years a payment will reset the clock, so to speak.

Hope this helps and all makes sense.

**happygrl** · 05-07-2012 10:04

I did forget to mention there are some pretty strict guidelines at to how many times you can be contacted, what they are allowed to say, who they are allowed to speak to etc. if they breach the rules you can put a complaint in with the ombudsman.

**mrtwsmum** · 05-07-2012 10:11

thank you for that happy girl.
Yes I didn't really want to go into a agreement with them, especially at that interest rate.

I will make them an offer to pay $600 as you suggest and see how I go with that.

the 5-7years would start from xmas time so I still have a long time to wait it out if I chose that option and I would rather just get it over and done with. I do wake up thinking about it at times. It all makes me rather sick.

I don't think I want to have the next 5 years with them calling me and mine. And the credit laws could change between nz and aussie in that time and it would all just get bigger than it needs to be.

I did complain to the FOC as they contacted my parents to get my contact details. They didn't say I had a debt with them but they said who they were which is then pretty obvious why they were calling.

Is there anything I should put in the letter (wording wise) to help protect myself. These guys have the worst reputation and I just want to make sure when I do acknowledge this debt by contacting them I am not making it worse.

**happygrl** · 05-07-2012 10:19

I'm on my phone ATM so will respond when I get home.

There are different tactics you can use depending on the size of the debt.

**mrtwsmum** · 05-07-2012 10:29

thank you any help is very appreciated.

I have tried local budgeting services, and they only deal domestic and don't know aussie credit law.

The ONLY financial counselling available through my work counselling programme is on holiday.

The debt was $3900 when they took it over in Feb. They have added $1k of fees on to make it $5k. I will dig out the contract when I get home to see what the original terms were. I don't know if they supplied it or just a statement of the debt when sold. Do they have to supply original contract? I would have taken card out about 7 years ago!

They also sent me a letter of financial position for me to fill out which I am reluctant to do. I don't want them to have details of where I bank, who I shop through or where my kid goes to daycare etc! Paranoid I know but from what I have heard of them they will do anything to badger you into things