Shipshape (Pilot Phase)
Shipshape is a legally binding debt repayment agreement. It has been designed for adoption by an individual client with debt obligations to multiple creditors, and structured following an holistic assessment of a client's financial position by Debtfix, an independent intermediary. Shipshape is currently in a pilot phase only.
Shipshape has been designed:
to provide a client with an alternative and less formal debt solution than existing insolvency procedures, to help them repay their debts in an affordable and sustainable manner;
to facilitate a better return to creditors by increasing cash collections over time and to reduce internal and external debt collections costs; and
for Debtfix to act as the Administrator to help keep a client on track, to administer the receipt and distribution of client funds to creditors, and to support the client through the process.
Debtfix, with the support of the financial capability sector will help facilitate access for a Client to localised social support services (where needed) and help empower the Client to make better decisions around money in the future.
Shipshape has been co-designed with representatives from the building financial capability sector (FinCap and Debtfix), various lenders and government departments. All parties involved in its co-design have the client’s wellbeing as a priority and have worked together to design some Guiding Principles and Terms of Reference for Shipshape.
The Guiding Principles (in the stated order of priority) are to:
A - Deliver a good outcome for a client;
B - Deliver a good outcome for creditors;
C - Create a process for reviewing and reporting on irresponsible lending practices by creditors.
How does Shipshape work ?
Shipshape is an arrangement between you and all of your unsecured creditors to pay off your debts over a period of time. Debtfix will work with you to make a realistic assessment of your household income and expenses, and in consultation with you, calculate a repayment amount based on affordability. Once we agree the repayment amount with you, you will then need to enter into an engagement letter with Debtfix and sign the Shipshape agreement, which will then be sent to your creditors for consideration and approval.
Once, the Agreement is approved by ALL of your creditors, Shipshape is then activated, and becomes legally binding.
We understand that your situation may change in the future. If things become more difficult for you, you can always contact us and request an adjustment to your repayment plan. Or if things improve and you prefer to repay your debt faster, that is possible as well.
There are no initial set-up costs or fees associated with Shipshape, however once agreed then the costs for the service are deducted directly from your repayments, with the net amount then being distributed to your creditors on an equal percentage basis calculated on the size of their respective debts. This means that the creditors are effectively paying for Debtfix to administer Shipshape.
Who can benefit from Shipshape ?
Shipshape is appropriate for people that have more than one unsecured debt. It is only available to individuals that have a reliable source of income that provides a weekly or monthly surplus over and above normal household expenses but before repayment of unsecured debt.
Shipshape might not be suitable for you - our advice about the best debt solution option for you will be based on a full assessment of your personal circumstances and the information provided to us by you.
As ALL creditors have to consent to Shipshape before it can be activated, there is possibility that your Shipshape might not be accepted by creditors (for whatever reason). Debtfix is unable to guarantee that a Shipshape will be accepted, however if an agreement is rejected by one or more of your creditors, then we can advise you on other debt solution options that are available.
Partnering with Fincap
FinCap works with over 200 financial capability and budgeting services in New Zealand to reduce financial hardship of people, whānau and communities in New Zealand.
FinCap work with these services to build the capability and professionalism of Financial Mentors and to reduce the causes of financial hardship.
FinCap is funded by the Ministry of Social Development as part of their Building Financial Capability initiative.
FinCap’s mission is “to reduce financial hardship by developing and supporting New Zealand’s free financial capability and budgeting services and advocating for system-level change”.