Personal Finance: Prepare for your road to recovery from debt

When you embark on this journey, the key is to start changing old habits. Otherwise, nothing can change because you have not set a new standard for yourself, new habits and new methods of controlling your new financial situation.

Once you have followed the steps to clear all the negativity and resistance and you are ready to approach your creditors then you must implement a stringent set of rules, which you must follow regardless because it is the only way. In fact,  failing to do this was the reason you got into the problem of a debt-crisis in the first place.

So go and get yourself a plan exercise book and enter in names of each creditor per double page until you are satisfied you have included everything.

Once you start this process you must record the following each time you interact or effect a payment to your creditor:

S  Dates of telephone calls with representatives and promises made to pay

S  Diarise the promise dates on your electronic calendar (pc) or your mobile phone so one day prior you receive a reminder

S  Record all creditor representative names, contact telephone no, mobile no, email, time of calling, discussion content, outcome and the follow-up date

S  Record all meetings you attended to present your situation, restructures you presented, outcome and follow-up dates

S  Record whom you met - designation, telephone no, mobile no, email address - and if you can, please do ask for their business card so you can staple it on the page of that creditor

S  Maintain a separate filing system segmenting all creditors and file all official documentation i.e. restructures presented and approved, email communication, copies of guaranteed cheques issued, original cheque issued if you replaced it and if you obtain it from the creditor once replaced, monthly statements, deposit slips and payments effected, etc

S  If you replaced an original guarantee cheque, then request the original to be returned and if it is not policy to return it, request an official letter that it is no longer being held as a guarantee and it is replaced by another cheque.

S  Request a copy of your new guarantee cheque and ask that the creditor sign to confirm receipt and include the date.

S  Try not to issue blank cheques, rather wait for the restructure confirmation and approval, go to the creditor and complete, sign, date, insert amount of each cheque and request copies of the same for your records.

S  Once you are in a position to settle your debt, request an official settlement letter, ensure that the final settlement is paid and request a final closure letter confirming the settlement and maintain this in your records.

S  If you are unsure, remember to always maintain records of all forms of communication and documentation issued, especially legal documentation like cheques, contracts, etc

Once you can implement this method of planning and maintaining records whenever you need to refer to any incident and simultaneously you must present proof of the same, then your only job is to take out your book and present it.

You cannot keep everything in your head because at the end you would end up shoving slips and documentation in here and there, much like you did when you were irresponsible spending the money, so this is your chance to gain clear perspective of your financial situation where you are in full control.

Nothing that any creditor accuses you again of not meeting a commitment or not calling or following up will ever happen again because you will be managing your log very stringently and only this exercise will start rebuilding your confidence and once the creditor sees this mode of operation, you again start re-establishing your integrity and credibility.

We are all susceptible to failure. It is what we do afterwards and how we react that is the key factor. There is such a situation where a debtor is willing to pay but not by the immediate means and even this can be proof to be presented to a creditor to afford you a time-frame to start commencing payments.

There are debtors who do not have good intentions or good will and that is purely a fact of life but if you have a good heart, good intentions and you arrive all totally organized to present and show your ability and will to repay, you can change any situation, in the face of any adversity. It is not what you do, it is how you do it and we all are afforded chances in life and then it is how we react to those privileges and second chances.

Remember, this is a new road that you are embarking on that is going to affect the full circle in your life so if you have a spouse or partner who keeps nagging at you or creates animosity because of the situation you are in, maybe they feel like you are drowning them too because they have to continually support you and throw their money into what they perceive to be a black hole or a situation with no ending?

Then zap out your book and show them how you are progressing, how far you have come, how hard you have worked to start doing things more structured, in your favour so that you too can see the light and see your debt reducing.

You have the ability to change people’s minds and if this is one of those opportunities then you have nothing to lose, except to feel proud of yourself that you took the bull by the horns and started a system to transform your own life.

One very important point is that when you have come down the road after sometime and you can see your progress, give yourself a pat on the back, because it is important that we acknowledge our own advancement as this is all part of the process of bouncing back and finally being debt-free.

[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.
She also conducts webinars and workshops on debt recovery.]

[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.]
 

Follow Emirates 24|7 on Google News.