Loan sharks and harmful practices are fast becoming one of the leading causes of child poverty. Debt collection and repossession is critically challenging for those who cannot repay debts. The Salvation Army and other Christian social service providers are prompting the government to introduce better policies, aimed at protecting the financially vulnerable, with stricter rules around limiting the hold of debt collectors on those struggling to make ends meet. Some families are having to endure unethical home invasions that essentially force them to relinquish personal items thought to equal the value of the debt, and more. On top of that, they are having to pay penalty collection fees to the collectors for doing so. “All this means that the stress of problem debts directly impacts children. They miss out on basic needs due to debt siphoning their parents’ incomes…”
Other protective measures being called for are better ‘able-to-repay’ assessments before lending can occur and new safeguards that govern and regulate debt collection practices. A Discussion Paper from the Salvation Army’s Social Policy & Parliamentary Unit (SPPU) explores debt collection, repossession and other debt recovery processes and policies in Aotearoa, with some key policy recommendations, including pushing for a new single law to regulate debt collection in our nation, and reviewing the effects of insolvency options on lower income Kiwis.
Our thanks to the Salvation Army for the resources. More information is available on their website.