"As a result of having experienced financial abuse, many survivors are left with high levels of debt, poor credit scores and lowered levels of confidence in managing money. Debt management is a crucial need for many survivors."
Providing Debt Management Services to Domestic Violence Survivors
Debt management services
Debt management services are intertwined with the work done during credit repair. They can range from simple acts like budgeting and creating repayment plans to enrolling in a debt management plan. The Federal Deposit Insurance Corporation (FDIC) Money Smart curriculum explains credit reports and the steps needed to improve them, including paying down past debt. Participants learn about strategies to reallocate monthly income toward debt repayment, as well as the importance of maintaining a manageable debt-to-income ratio. For more details on the debt management information in the Money Smart curriculum, see the “To Your Credit” training module at http://idaresources.org/page?pageid=a047000000B3fXa.
How can domestic violence survivors benefit from debt management services?
Financial abuse is a common form of abuse in domestic violence situations. Abusers often run up debt, ruin credit, and hide money from their partners. Many domestic violence survivors describe it as the main reason that they stayed in an abusive relationship or returned to one. (For more information about financial abuse, see http://idaresources.org/page?pageid=a047000000Bneu4AAB.) As a result of having experienced financial abuse, many survivors are left with high levels of debt, poor credit scores and lowered levels of confidence in managing money. Debt management is a crucial need for many survivors.
Basic debt management services may revolve around the same steps as credit repair - getting a sense of how much is owed to whom, and at what interest rates and terms. The next step is to set up a plan to begin paying off that debt. AFI grantees may have financial counselors in-house to assist with this step, or may refer to partners who can help parents develop an individual plan. (For more information about credit repair, see http://idaresources.org/page?pageid=a047000000DfWd0AAF)
Resolving debt may require personal contact with creditors or the holders of that loan. The sooner a survivor contacts a creditor, the better the chances for negotiating a modified payment plan with a lower interest rate and/or lower monthly payments.
For more intensive assistance, survivors can take advantage of a debt management plan. In this program, the client regularly deposits money with a credit counseling/debt management organization, which then makes payments to the various creditors. The creditors may agree to lower interest rates or waive fees in exchange for regular timely payments through the program.
How can domestic violence service providers and AFI partner to provide debt management services?
Both AFI and domestic violence service providers have much to gain from such a partnership. AFI and domestic violence service providers can work together to identify survivors in need of more intensive debt management assistance. AFI grantees can train domestic violence service providers about various options for helping survivors build financial stability, allowing programs to be more savvy about meeting the economic needs of survivors. Domestic violence service agencies can train AFI grantees in the available options for addressing domestic violence and assist with safety planning in order to better counsel survivors. Under such collaborations, both partners can increase their knowledge about financial resources and share financial expertise to build better financial plans for survivors.
This is one in a series of fact sheets on asset-building and Domestic Violence Survivors produced by the Assets for Independence Resource Center. For more information about AFI services, visit the resource center website at www.IDAresources.org or contact the center at 1-866-778-6037 or via email at info@IDAresources.org To find an AFI grantee near you, go to http://www.idaresources.org/Map. To search for domestic violence programs by state go to: http://www.nnedv.org/resources/coalitions.html. For more information about the safety challenges of survivors or for guidance on developing safety protocols contact the National Resource Center on Domestic Violence at 1-800-537-2238. For information about how to partner with local or state domestic violence programs, contact the National Network to End Domestic Violence at 202-543-5566. Survivors in need of assistance can also call the National Domestic Violence hotline at 1-800-799-7233.