Debtors, when finalizing your debt-crisis solution, lose your concern about your credit rating!

Credit ratings are very important, but the last item on the agenda when you are facing a debt-crisis.

Our recent experience is that 8 out of 10 debtors in this situation, first ask the question about how their credit ratings are affected, if they approve remedial action on their delinquent accounts.

My question is, how important is this? As far as I am concerned, zero! Why are you focusing on the possibility of obtaining more credit in the near future, when you are already drowning and on your way to the slaughter house?

Here’s what should concern you right now…

a. The best solution to achieve an approximate 50% DBR (Debt Burden Ratio), so you can be on the path of Debt Recovery, affordably repay your EMI’s (Equated Monthly Installments) and actually see your debt reducing every single month, instead of having your EMI’s obliterated by the many penalties applied, due to high interest rates;

b. Eliminating your delinquency, where some of you are delinquent for as much as 8-12 months at a time, labelled as ‘Not paid’;

c. Avoiding legal action and cases being filed against you, by being proactive;

d. Avoiding collections representatives visiting your Human Resource Manager at your office, and perhaps being terminated, because being in dire debt is normally unacceptable by most employers, especially when it rears its ugly head at your place of employment;

e.    Being more productive at the office, instead of guarding your office telephones and mobile phones that don’t stop ringing all day, as creditors become persistent for you to clear your default EMI’s;

f.    If you qualify, then trying to secure a ‘Buy-out’ to consolidate all your debt and only pay one affordable EMI, which simplifies your life even more;

g.    Being able to sustain yourself and your family commitments monthly with ease;

h.    Releasing the pressure, emotional fear and all the negative emotions from your being, so you can focus on what is important and quit accumulating resistance, which will hamper your advancement in all facets of your life;

i.    Simultaneously, scaling down on unnecessary costs, i.e. selling unnecessary assets or liabilities that would further reduce your overheads, like a car if you have 2 cars, maybe you only need one, or relocating to a new residence with a reduced rental etc.… You know what you must do and where you have been extravagant! Cut down on costs that you cannot afford at this point, as it will reduce and ease many financial burdens and forget about the people, as they do not pay your bills, you do!

Only once you have repaid any account, can you secure a credit report and inquire if the rating can be improved and continue to apply those actions, until your rating is improved and normalized;

When you embark onto a path of Debt Recovery, then life is not a bed of roses, as there is a certain degree of sacrifice that is required, which by the way, you are not supposed to complain about, as this is the lesson of debt, else at the end of the journey, you have learnt zero and will simply go do it all over again, given any opportune moment to secure credit.

At the end of this journey you must be allergic to credit, unless you know in your mind that you can actually afford it, maintain the EMI’s and the commitment that goes with it and not inflict a bad situation onto your family, your place of employment or those that you love. If you do, you might not come off so lightly again, it may actually transform itself into a very harsh lesson that you will never forget, and I am serious.

One very key factor you should never forget is that the credit may have been acquired very easily, but it didn’t happen overnight for you to find yourself facing a debt-crisis, so why do you expect miracles within a week, month or a few months? Rome was not built in one day and it requires patience, perseverance and commitment to derive at the place where all your debt is consolidated and/or restructured, and your situation is transformed.

But most of you once you have dumped your debt on someone else’s table, whether that be a creditor or remedial company, then you are on the phone the next day for an update, hoping that the problem is resolved. Let me share with you it does not work this way, patience is a virtue, plus you are not the only debtor that creditors must attend to, there are others in the queue before you and finally, demanding and acting obnoxious is not on the agenda! You do not have the luxury to make demands of 50% discount, when you enjoyed the luxury of the credit, you need to show some respect, because you are not entitled, not even if you face a bad situation.

When you are desperate to get out of debt and you have approached a creditor or remedial company, especially if you are way over your DBR, then write ‘patience’ and ‘diplomacy’ on your forehead, stick with that and wait for the outcome. Only once you have a firm response and you are unhappy, then feel free to present your response again, in the most diplomatic way, because it will serve you.

Finally, remove the idea that you have in your head to want to steer away from bad ratings on the credit bureau, because your situation lends itself to bad ratings now, without exception as everything is recorded. But most importantly, you cannot have your cake and eat it, because your situation does not qualify you to be in the least perturbed about retaining good credit ratings.

Credit is the last luxury you should even think of at this time, forget you don’t quality, but realize that it is important that learn from this very significant experience and once you are qualified and have learnt the lesson of debt and find yourself in a comfortable place after suffering, I guarantee you that credit will be the last attraction for you.

That right there is the ultimate objective that every debtor facing a debt-crisis should achieve, remaining debt-free for life, unless it is totally necessary to purchase something you need and can afford, like a home, which is essential if affordable. Next time, spend your money on invaluable tangible assets, not intangibles that you cannot account for now and you don’t know where the money is! If you know where the money is, then be honest, use it to repay the debt, don’t seek the easy way out as we pay dues in life, maybe not now, but when we least expect it.

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