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19 March 2024

Personal Finance: Debtors, what’s your freedom worth?

Theda Muller

Published

There is no feeling greater in the world for any human than learning that freedom is achievable. However, that materializes only if you are willing to take action and make sacrifices.

Your financial freedom should, therefore, be your ultimate goal and you should be able to maintain that equilibrium in your life once you achieved it, rather than looking at how many more loans and credit cards you can secure once this journey of recovery is over. Who thinks this way? Apparently many.

You cannot expect to create something new with old habits. This is not the way it works, because you will find yourself in a financial mess sooner than you think.

I find many debtors who approach us for assistance are more concerned with the fact that if they approve to resolve their current situation by way of a consolidation, restructure or buyout, will they be able to qualify for more credit facilities in the future.

Why on earth would you want to continue this vicious cycle of debt? You proved you are incapable of effectively managing your debt, which is why you sought help.

Then there are those who have a 200+ per cent DBR where we reduce it by more than 100 per cent and they are still ungrateful, seeking more buyout loans where they can score with a bit of extra surplus cash that is disbursed once the buyouts are settled.

Here I say - first be grateful for succeeding this far to reduce your DBR by 50% per cent or more, then once this is over, review what other action can be taken to further reduce your DBR and move your mind away from additional loans as you will simply be digging a new hole to cover an old one!

So nothing changes, the journey just becomes more treacherous and hard which in turn makes you more despondent. So the lessons are:

* Learn from your past mistakes and don’t repeat them

* If you were money savvy you would not be in this position in the first place, so just taking brash decisions because you assume that you know it all is the wrong action to take.

* Respect and understand that there are people who are experts and if you go to them for advice, then show them your gratitude and appreciation. Stop pointing fingers at what you perceive as wrong when the person is making the effort to help you. Remember people sitting on the outside looking in, see more than you do as they do this with a neutral eye and opinion and their experience.

* There is nothing more rewarding than knowing that you just stopped being penalized for your late payments, over limits and similarly on your credit facilities and that now you can actually see your balance reducing. This means you must only be committed and sincere in achieving this goal, then comes the freedom! So why would you not want it?

When you have used a specific amount of credit from a bank and you have not paid one single iota towards that principle, don’t assume smart tactics by demanding a 50 per cent discount settlement when you have the cash in your hand to pay an amicable settlement. It’s unethical and immoral where debt recovery is linked to specific principles of integrity where you are bound to those until the end. There are not many short cuts to financial freedom, in most cases just pure sacrifices and the will to want to achieve it.

When you do the right thing, financial freedom leaves an awesome taste in your mouth, it also makes you a better person as you respect, appreciate and gain invaluable knowledge including finding specific values you never valued in the past.

When you can go to sleep at night and go through your entire day in peace without creditor calls, then you have achieved true financial freedom and who can dispute this fact?

Financial Freedom is sweet, it awakens a consciousness of many facets of life that I urge many to learn one day at the end of their recovery journey because it would have all been worth it.

When you are facing a financial crisis

* You are at the mercy of your creditors.

* You must learn the art of humility, respect and appreciation

*  You must learn the value of true integrity.

*  You must acquire immeasurable amounts of patience and sacrifice.

In doing all of the above you will learn how to create a new reality for yourself because you would have learn’t how to think and talk differently and act differently towards people, which will in turn change the way situations manifest in your life for you, because you would have learn’t new tools and techniques to enable you to do so.

Nothing changes if you don’t change!

[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.]