Mortgagee sales and rent evictions as client debt with Bay Financial Mentors climbs $14m in a year

Mortgagee sales and rental evictions are just some of the issues Bay Financial Mentors have dealt with this year as total client debt levels spiraled by more than $14 million in one year.

Manager Shirley
McCombe said it had been a tough year for its clients and, at times, the team.

Figures show total accumulated client debt jumped to $75.5 million in the year to November from $61.9m over the same timeframes in 2021 and client numbers were up by about 10 per cent.

Money clients owed to debt collectors also increased from $1,176,987 to $2,254,161 which was a big concern as it ‘‘shows how many people have lost control of their debt’’, McCombe said.

The cost of living was a major challenge including rising accommodation costs, food and petrol.

‘‘Our team has supported people through some very challenging situations, such as clients facing mortgagee sales, eviction from rental properties, and clients with large amounts of personal debt. To see a person move from suffocating debt to being debt free and able to save is incredibly rewarding.

‘‘Saving allows people to be more resilient and to manage challenges (like car repairs) without having to turn to high-cost lenders or Work and Income for help.’’

More people in paid employment were also struggling.

‘‘Even with two incomes, many whānau still struggle to make ends meet. It is also particularly hard for those who are single and do not have any children.

‘‘Advocacy is important to us, and we have worked with the Financial Complaints Service and the Commerce Commission to address problem lenders and pawn brokers. We made submissions regarding the proposed changes to the way Buy Now Pay Later regulations are applied and to the changes to the Consumer Credit Contracts Act.’’

Buy Now Pay Later debt with Bay Financial Mentors clients had also soared from $64,120 to $97,103 in the year to November compared to the year before.

McCombe said the service had built relationships within the social service sector to allow it to work with other organisations including the Pacific Island Community Trust, Tuinga Whanau, Takatimu, Awhina House and Accessible Properties.

‘‘None of us have all the answers, but together we can wrap around clients and give them the best chance to thrive.’’

Its education programmes had been broadened and the number of clinics in the community would increase.

She was proud of her team and it had a lot planned for 2023.

‘‘We want to make sure that every person in the greater Tauranga area knows who we are and how we can support them. It is going to be a tough year for many people, but we want to remind them that there is help and that they do not have to face their challenges alone.’’

Tauranga Community Foodbank manager Nicki Goodwin said the service connected with Bay Financial Mentors and it provided a vital service.

‘’About 25 per cent of the households we help we connect to them so we have a really close relationship. The staff there are all qualified, they have some really amazing skills and are good kind people.

‘‘They can have a look over someone’s situation and work alongside them to see if there are changes that can be made.’’

Goodwin said it was a free service and there was nothing to lose but everything to gain by talking to Bay Financial Mentors.

There was ‘’absolutely no shame’’ in asking for help as outgoings had gone up.

She said what worked particularly well between the services was Bay Financial Mentors could refer people to the foodbank in order to free up funds to meet bills or other demands.

‘’We are really grateful to work with them as we are often assisting the same people.’’

Ministry for Social Development client service delivery acting director Karl Oliveira said its clients were referred to Bay Financial Mentors and it received Building Financial Capability funding.

Building Financial Capability Services help individuals and whānau to improve their financial wellbeing.

These services take a strengths-based approach to empower people to get control of their money, set goals and achieve long-term, sustainable change, he said.

Its benefit data reveals in the September quarter in the Bay of Plenty $505,816 was given out in food grants compared to $540,816 in the September quarter last year. Over the same timeframes, it paid $1.4m and $1m for accommodation-related expenses.