In an Australian fin-tech first, a Melbourne based company has developed an app that allows users to negotiate their debt with creditors from a single platform. The app, called Lever, streamlines the negotiation process, giving users greater control of their credit.
According to ABS data, Australians’ financial stress has increased over the past 24 months, particularly amongst working people. According to the ABS, on average Australian households increased their debt by $1000 for day to day living expenses in 2020.
Lever was created to help Australians understand their options in settling debt. According to its founder Trent McKendrick, many Australians don’t understand they can negotiate with creditors to make debt repayment manageable.
Debt negotiation allows debtors and creditors to settle debt on terms that work for both of them. However, this is often an arduous process that involves spending hours on the phone and disclosing very personal situations.
Mr McKendrick said, “It shocked me that 89% of Australians don’t know that debt negotiation is an available method of financial assistance and one that doesn’t hurt your credit score. I created Lever to generate awareness about debt negotiation and help Australians get back in control to resolve their debts without the added stress.”
He continued: “Lever has been developed to make an emotional situation more positive by giving consumers the tools and support they need to negotiate, settle and move on from their debt, without impacting their financial future by protecting their credit scores.”
How Lever works
The app is available to both individual debtors and businesses trying to manage their debt better. It consolidates all debts and all settlement options in one place, empowering individuals and companies to take control of their finances.
Mr McKendrick said, “When you open the Lever app, you’re shown all your options to negotiate the way you pay your debt. You can then choose the option that works best for you, type your message directly to your creditor, and then you’ll be notified when they respond.”
Lever allows users to negotiate several debt types, including parking tickets, fines, utility bills, phone bills, car finance loans, and debt collection demands. Lever allows fast and easy communication so customers can negate new debt terms, including reduced billing frequency, payment plans, and discounted settlements.
“Lever at first was seen as a ‘what is this situation’ platform, but with early feedback from some of Australia’s largest utilities and telco providers, as well as personal loan and BNPL providers, we’ve been allowed to be agile and provide a digital-first solution to a process that traditionally requires three to four points of contact with the consumer before even starting the process of collecting debts or bills,” Mr McKendrick said.
How Lever will help Australians
Lever will allow users to regain control of their financial situation off the back of a difficult two years. Since the pandemic, many businesses and individuals have relied on debt to keep their heads above water. With this in mind, it is essential for Australians to understand their debt; Mr McKendrick said that by understanding debt, it could be better managed and controlled.
Mr McKendrick said, “Debt can be stressful – so stressful that calls to Lifeline about financial pressures were up 40% in August year-on-year. Lever helps to make an emotional situation more positive by giving consumers tools and support to negotiate their debt and move forward without hurting their credit scores in the process.”
He continued: “Having a thorough understanding of debt is really important so that you can avoid getting into debt. Getting into debt can impact your ability to buy a house, borrow money when you need to, and create financial instability. Beating debt is important so that you can regain control of your financial situation, allowing you to build savings and wealth and not need to live paycheck to paycheck.”
Message to Australians struggling with debt
Trent McKendrick’s message to individuals and businesses struggling with debt is that there is a way out, and communication is key.
“Communicate, communicate, communicate, and don’t leave it until it’s too late. The sooner you communicate with your creditor and let them know your situation, the more likely they’ll be to work with you on a payment option that works for you.
“Instead of getting stressed and taking out a band-aid fix like a personal loan or credit card to pay your debt, know that legislation is on your side when it comes to debt negotiation, and communicate with your creditor as soon as possible.
“Every [creditor] acts like they are the powerful one, and the consumer isn’t. Because they’re big and complicated, it can make things really scary for Australians when life circumstances change, and they can’t pay an overdue bill or unexpected expense.
“I hope Lever will show Australians that companies don’t need to be the powerful ones – they can be by taking control of their debt and negotiating their payment in the way that best fits their personal situation,” said Mr McKendrick.