Kate’s abusive ex-husband racked up almost $86k of debt in her name. This is how she got help

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Shortly after domestic violence survivor Kate (not her real name) left her husband, the banks started chasing her to repay debts in her name.

During the relationship, her husband was violent towards her if she did not agree to sign loan or credit applications, and her sister-in-law had pretended to be her to get credit from the banks.

“I couldn’t even sleep the whole night, I was having bad dreams. And I was waking up, and had a lot of bad thoughts in my mind. I was totally stuck,” she said.

Kate thought she was the one who had to repay the money owed.

Her credit report revealed she had racked up almost $86,000 in debt through loans and credit cards in her name that she had not benefited from.

Kate’s story is more common than you might think, with up to 90 per cent of women fleeing family violence also experiencing economic abuse.

It was not until she got help from a lawyer and financial counsellor, who advocated on her behalf with the banks and negotiated for the debts to be waived, that she realised there was a way out — the Transforming Financial Security Pilot Project (TFSP).

Run by WEstjustice and McAuley Community Services for Women, the project has helped 137 women in two years wipe a total of almost $1 million of what’s known as “coerced debt”.

Coerced debt is incurred by an abuser, in the name of a victim of domestic violence, through threat, force or fraud.

“Most women don’t know how much debt they are in until we order their credit report,” says TFSP Project lawyer Dacia Abela.

“The debt could include many things like car registration, credit cards, loans, contracts that they’ve been forced to sign, infringements, utility debts.”

What should you do if you think you’re a victim of coerced debt?

Dacia says the best thing to do is get help from a financial counsellor or community lawyer who can negotiate with the creditors.

The National Debt Helpline is a good place to start as they provide a free and confidential service.

Another great resource, which actually breaks down the types of situations you might be worried about like credit cards, personal and home loans and credit reports can be found at the Centre for Women’s Economic Safety.

You could also obtain a copy of your credit report to get a picture of how much debt you’re in. The companies that provide them must give you a copy for free every three months, according to the Australian Information Commissioner.

However, accessing and understanding your credit report can be tricky without help from a financial counsellor or community lawyer.

You should also let the companies chasing you for money know about the situation you’re in. Banks and utilities companies also have policies and codes they need to abide by when they know domestic and family violence is involved.

Smaller lenders, debt collectors and buy now, pay later companies aren’t subjected to the same codes and regulations, so getting them to wipe debt could be difficult.

This is why, once again, it’s important to get a financial counsellor or legal centre to advocate for you.

“If you can’t resolve your issue directly with the company, you may also be able to get help from the relevant industry ombudsman, such as the Australian Financial Complaints Authority, Energy Ombudsman Victoria or Telecommunications Industry Ombudsman,” Dacia says.

Reducing the burden on women

The Transforming Financial Security Pilot Project is currently seeking funding from the Victorian Government so it can continue to operate.

Rebecca Glenn, the founder of the Centre for Women’s Economic Safety, says the TFS Project’s model of a domestic violence service working with a legal centre to provide financial counselling is best practice and should be replicated around the country.

“We need to reduce the burden of getting help for women in this situation. Being pulled from service to service to get help is exhausting,” she says.

Dacia says the program works, and has saved the Victorian and the Australian governments around $300,000 a year each in avoided court costs.

She says more importantly, economic empowerment saves lives.

“When someone experiences economic abuse, they can be financially constrained from leaving a violent relationship. And it may even mean in some circumstances, they end up returning to a violent relationship,” she says.

Kate also has some advice for other women in her situation, particularly those from culturally diverse backgrounds like herself.

“I was just thinking physical violence is violence. I want to create the awareness among the women that financial abuse is also a kind of violence,” she says.

This is general information only. If you need personal advice, please seek out a professional.

By business reporter Rhiana Whitson (Original ABC Article)