Charity helps debtors repay their loans

Charity helps debtors repay their loans

SINGAPORE - Her gambler ex-husband left her depressed with his womanising and saddled her with $140,000 in debt. At her lowest point, Joey (not her real name), a 50-year-old secretary, did not even have enough money to pay the electricity bills. She tried repeatedly to end her life.

The mother of three boys said: "When a woman is in love, she is very blind. He didn't support our family and was constantly asking me for money. I would do anything to help him. Later I found out he was gambling at casinos and flirting with other women."

She borrowed for her bankrupt husband on eight or nine credit cards, using one loan to pay another, without realising how much she was racking up in interest. For five years, she coughed up $2,000 to $3,000 in monthly interest payments alone, and her debt kept snowballing.

Last year, she found a lifeline at Credit Counselling Singapore (CCS) after her sister told her about the charity. It helped her negotiate with the banks she owed a much lower interest rate, from 24 per cent a year to 3 per cent. Joey, who is not a bankrupt, now pays $1,400 a month to her creditors - a sum she finds more manageable.

She said: "I feel the CCS has saved my life and given me hope." Without the CCS, more debtors would face the threat of insolvency, said its president, Mr Kuo How Nam. The CCS helps debtors negotiate with all their creditors for a significantly lower interest rate and to extend their repayment period, thus making it easier for them to repay their debts. And once they keep to their payments, the banks are unlikely to sue them for bankruptcy, he said.

Last year, the CCS saw a 47 per cent spike in clients, from 1,090 in 2011 to 1,605. The increase is likely due to more people facing financial woes and greater awareness of the charity's work, he said.

People fall into debt for reasons such as overspending, unemployment or pay cuts, medical bills and gambling debts. They had an average income of $3,450 and an average debt of about $80,000 last year.

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