Sarah, a single parent of three children, was struggling to afford basic necessities for her children and applied for credit through two major financial institutions. From the onset, Sarah was unable to meet the required debt repayments and eventually a debt buyer who had purchased Sarah’s credit card debts commenced legal action to pursue the payment of $41 500. This posed a substantial risk to Sarah as she had equity in her home that was also mortgaged.

Our consumer credit lawyer determined that there were grounds for an investigation into irresponsible lending and Sarah was advised to lodge a complaint with AFCA to pause legal action to allow time for an investigation. The case was then referred to the in-house financial counsellor from Uniting Care.

The financial counsellor undertook a historical statement of financial position to determine Sarah’s capacity to meet the required repayments, and further investigations clearly showed that neither of the financial institutions undertook reasonable measures to ensure these debts were affordable. One of the credit providers also admitted that an error was made when approving the credit card and personal loan.

The debt was subsequently waived, a life-changing outcome for Sarah as her home was no longer at risk and the anxiety and shame associated with financial stress also lifted. Having the financial counsellor embedded within Caxton provided a simplified pathway for Sarah to access essential services, which resulted in an enhanced experience and a much timelier and more optimal outcome.