'200 years to pay back debt': Lender reveals cost of leaving abusive relationships

RNZ News

16-07-2025

Leaving an abusive relationship often costs thousands of dollars. (File photo)
Photo:
123RF
A woman whose relationship deteriorated into abuse after she was diagnosed with a serious tumour, had to save for ten years to be able to leave.
Social lender Good Shepherd said it was just one example of how hard it can be for people to get out of abusive relationships.
The woman, whom Good Shepherd refers to as "Jen" to protect her identity, said the relationship dynamic changed when she became ill.
"He took control of their finances including the support payment she received due to being unable to work. He would not allow Jen to access any money," Good Shepherd said in a note about the case.
"His psychological abuse worsened over time. He wouldn't let Jen buy anything or drive their car. Jen was forbidden from seeing her friends. With no access to money, Jen got a credit card and kept a bank account hidden from her partner."
It was ten years before she could leave the relationship, Good Shepherd said, and moved into a one-bedroom flat with her daughter, where they had to share a bed.
She worked with Good Shepherd to wipe $7500 of bank debt she had built up during her relationship, and received a $300 grant to buy a second-hand kettle, reclining chair and fold-out couch.
"Having to save for 10 years to leave a violent relationship is awful," said Good Shepherd chief executive Emma Saunders.
Good Shepherd provided low- and no-interest loans for women and families facing high-cost unmanageable debt and economic abuse and family violence.
Saunders said the organisation's analysis showed the cost of leaving an abusive relationship often came to at least $10,000.
Someone's income could be disrupted and they would face high costs in finding a new place to live.
"Social housing is available but the waitlist at March 2025 was sitting at 19,308 and it can take a long time to access."
They might also need a car, a couch, a bed, a fridge, kitchenware, and clothing. Many people left all their possessions behind and had to start from nothing, she said.
"This is only a small snapshot of the essential goods a woman fleeing violence would need to purchase for a home of her own.
"They may also need to repurchase medications, prescription glasses, and other disability aids if needed."
She said her estimates were based on people buying second-hand.
"We're not talking about top of the range stuff but when you add moving costs and bond, household and personal items, people are often starting with zero."
She said there needed to be continued awareness of family violence economic abuse.
"Money is really essential to women experiencing abuse, leaving a relationship."
There should be improved policies and practices to support customers experiencing family violence, and increased recognition of it in government work programmes, she said.
She also called for more legal aid and free legal advice, as well as the eligibility limits being removed for cases where there was family violence.
She said often it looked as if people had money that they did not actually have access to.
Saunders said all debt-to-government related to family violence should also be wiped and people should be offered a one off grant.
Saunders said most help was available as a loan rather than a grant, which left people paying off debt for a long time.
"Even when it's an interest-free loan, it's still money you have to pay back, it's still money out of your pay packet. It's still money that you couldn't afford because maybe within your family violence situation you didn't have any access to money, or you had debt taken out in your name that you didn't know about and then you weren't allowed to work…
"We have one client at the moment who it'll take over 200 years to pay back the debt she had to government.
On one hand you think fantastic that they didn't say 'no you can't ever pay it back so we won't lend you something'… but on the other hand how ridiculous is that?"
Fincap, which represents the country's' financial mentors, made a submission in June on the Credit Contracts and Consumer Finance Amendment Bill and said more needed to be done to support people coming out of violent relationships.
They said mentors had dealt with multiple instances where women had debt on car loans they had been coerced into agreeing to and no access to the vehicle.
In other cases, someone who separated from a partner with whom they had a mortgage were stuck paying unaffordable repayments because a partner refused to make a hardship application or refused to pay their share of the loan payments, putting the house in jeopardy.
"We recommend the committee report back that the Government should look to endorse, or set, a review that determines how the law best supports fairness and efficiency in improving outcomes for borrowers who are survivors of family violence."
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