Personal finance: How to decide who can help your debt crisis

Before you take any one step forward when deciding to take action on your debt crisis situation, remember these very important points first:

1.     Don’t act out of desperation – Refrain from just take anyone’s advice, especially when they are asking you to hand over your credit cards to clear your existing debt, take 100 steps backwards, run out of the door and never return there again.

2.     Destroying your own card - Know that the bank will rather inform you that your card is permanently blocked, so you can destroy your own card with peace of mind that nobody else has it.

3.     Additional card requests - Don’t fall for the trap instructing you to apply for additional cards and then upon receiving them, you hand over your cards and pin no’s – This is a NO!

4.     When you are meeting the person who will help you - Take note of your inner emotions or intuition, as it is normally a very good indicator of the decision you must take. Don’t push a ‘yes’ if you feel ‘no’ if you have an uncomfortable, unsafe feeling inside, just stick with the latter as it is a confirmation you must heed to.

5.     Whom to deal with? - Deal directly with your bank or a credible entity/company/individual connected to your banks and again, that ‘safe’ feeling must be there.

6.     Requesting credentials - Don’t be scared or shy to ask for their credentials, don’t deal with anyone who cannot give you any proof.

7.     Anything that sounds too good to be true, normally is – DON’T deal with anyone who comes with huge promises to have you debt-free tomorrow morning but requesting any form of payment first.

Ensure they have a reputation that matches their request with a good track record.

8.     Handing over blank cheques - Please people, this is your life, so DON’T ever hand over blank cheques to any of these people, even with the bank, try to issue a PDC with an acceptable amount recorded for your current/new/restructured/consolidated total liability.

9.     Handing over cheques - If you ever hand over any guarantee or other cheque to anyone, make a copy and ask the person to sign proof of receipt. Keep that document in a safe place as it is your gold and sometimes can save your life!

10.     Official receipts - Where you hand over anything, ask and insist on an official receipt.

11.     Contract copies - Where you sign contracts, ask and insist on a copy for your records, it is your right, so don’t feel embarrassed or shy to ask!

12.     Passport handover - No matter how desperate you are for money, never compromise your passport for that money as it could be detrimental in the future.

Desperation means you will never find a solution, because you just created a negative space, so expect ‘more of the same negative’, until you decide to change your mood to positive.

So take the time to relax, take a break and think of a better alternative solution, even if that last resort is directly approaching your creditor. Digging a new hole to cover an existing one is not the solution, but rather creates a bigger problem.

13.     Record Maintenance - Learn to maintain files and records, it’s never too late, start today, maintain files for each account and file each current and new documents in that file as you cannot remember everything, you will slip up.

So if you have the hardcopy proof, then there is nothing like it and it will continue to grow your confidence levels. It is also an indication that you are now in control of your debt and life.

14.     Settlement/Restructure/Consolidation approval – Very important: Before you take someone’s word over a telephone that either of these requests were approved, that you can now proceed to pay the funds, first request an official letter, on their letterhead, confirming the same.

Only once you receive this do you proceed with the payment and once paid, request for the official letter confirming the same.

In the case of a final one-shot Settlement, the letter must stipulate that the account is settled and closed recording the company stamp and authorised signature.

15.     If some debt company informs you they are affiliated to any of your creditors whether they are private companies or individuals - Make the time to verify their authorization to deal with you if you feel uncomfortable.

Remember, if you are a debtor owing money for general debts like loans or credit cards and in some cases normal credit facilities, then you still have rights to verify information before dealing with anyone. So never relinquish that right or power. Safeguard yourself, exercise your rights, ask questions, get the proof and only once you are comfortable, proceed with the process.

Too often, debtors live in fear so they are scared which means any bright light even if a misrepresentation comes along, they tend to just succumb, agree and approve without realising the consequences.

When you follow these basic steps, you simplify the process for yourself, because as you follow the steps, you learn how to secure the previous one, before you proceed to the next one. So by the time the process is complete, you’ve completely secured yourself and you don’t have to wonder ‘what if?’ because you have the proof of everything.

[Note 1:  Theda Muller is a UAE-based author of two books: Embrace Financial Freedom Volume One: 10 Proven Ways To Release Debt And Emotional Fears In Today’s Economy, and Volume Two: Releasing Fear And Bouncing Back From A Debt Crisis.]

[Note 2: The views expressed are the author’s own and do not reflect in any way, the views of Emirates 24|7. Readers are advised to carry out their own due diligence before taking any decision.]
 

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