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As Buy-Now-Pay-Later (or ‘BNPL’) deals become more common in Australia, so do the horror stories of those who can’t make repayments.

Read on for steps to take when dealing with what can feel like spiralling debt.

It happens – we need to cover unexpected expenses or essential items when we don’t have the money for it. Then along comes BNPL, saying ‘Ehh, don’t worry about it – I got you…’. It’s just too easy and too convenient. So you sign up…

But before you know it, repayment deadlines arrive and well, other stuff’s come up – maybe a family separation or relationship breakdown causing a whole new set of problems, or you had to move out and the bond you expected back didn’t come through, or… point is, you just can’t make that repayment right now.

So, in comes the late fee ...

Which means more cash you’ve got to come up with. And now there’s something else urgent, only there’s not enough in the bank for it… but wait, who’s this? It’s old mate BNPL back again. ‘Can I help you…again?’

After turning to BNPL and other risky ‘no-interest’ loans for essential items, millions of consumers worldwide are owing more money than they can afford to repay. It’s affecting lives in practical ways as people’s relationships, happiness and mental health are impacted.

If you’re dealing with uncontrollable levels of debt, here are 5 steps to help get you back on track:

  1. Make a list – Sounds obvious but write down everything you owe now and any payments that might be coming in soon. Put due dates beside each amount and put them in date order.
  2. Communicate – Contact utility, telecommunications or car registration providers, and any other debtors you have, and ask them if they can provide flexible payment options, such as break payments down into smaller bills or push due dates back (without extra cost).
  3. Consolidate? – Obviously not everyone has this option, but if you happen to have a mortgage or overdraft with a bank, it might be more favorable to talk to the bank about extending that loan and moving other high-interest debts across, rather than relying on high interest credit cards and risky short term loan products.
  4. Delay discretionary spending – Got any regular payments that can be temporarily delayed or cancelled? Maybe now’s the time to temporarily put that Netflix or Spotify subscription on hold (and put up with the free version’s ads for a bit?), or whether you can deal with that ‘toaster that only works on one side’ for just a bit longer – just until you’re in the black again.

Now you’ve done all the above, adjust your list of payments and due dates to see how things have changed (hopefully for the better!). And finally…

  1. Talk to us! – Good Shepherd has a Financial Independence Hub providing anonymous, confidential and free financial counselling and support for people who have experienced financial abuse through family violence. We also have a No Interest Loan (NILs) program, offering eligible clients no interest loans for essential products and services (including education essentials, laptops & technology, car repairs & registration and medical and dental – even vehicle loans!).

Yes, big debt can feel stressful and unbeatable, but with a bit of planning, discipline and the right support you can start taking steps towards financial freedom and getting that monkey off your back.