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28 March 2024

Advice to Debtors: Stop seeking solutions with hidden agendas

Theda Muller

Published
By Theda Muller

What does make my blood boil are debtors facing a dire crisis where they are in a situation of a 200%+ DBR (Debt Burden Ratio), however their main focus is:

1.            “Will I be blacklisted?

2.            If so, for how long?

3.            A bank offered me a credit card with a high credit limit, I am thinking of taking it!

These should be the furthest thoughts from your mind when you are in a serious debt crisis and here’s why:

a.            You need to only focus on your current debt-crisis.

b.            Making more holes to cover existing holes will worsen your situation.

c.             You are so accustomed to spending money that you don’t have, so just the thought of cash liquidity is a ticking time bomb ready to explode when that new cash hits your hands because:

i.              You will not repay your current debt or settle any of your cards or loans;

ii.             You will convince yourself that you need the cash more to service your ‘other debts; than repay the banks as somehow in your delusional state of mind you convinced yourself that another miracle with save you………..WRONG!

iii.            You’re so busy figuring out that if you were not going to be blacklisted how much more credit you could secure;

iv.           You assume that more cash will resolve your problem forgetting that you are in this debt-crisis due to a dire lack of discipline and financial management;

v.            Being in a state of emotional desperation there is no clarity, so my advice is go and get some professional remedial help that will ensure these thoughts are eradicated from your being and that you actually get to see the ‘leaves from the trees’;

Realise that:

1.            You have a very serious problem that is probably way out of control;

2.            Which means you need help, fast;

3.            So your options are go directly to your bank or a reputable remedial company who can help you;

4.            Before you go do your preparations and have all your financials ready, including your income and expenditure schedules;

5.            Remove the thought of anymore credit whether you qualify or not and if credit is possible then ensure it eliminates some of your debt in one-shot settlements;

6.            When you get the cash put spending out of your mind, because if you don’t then you deserve what is coming to you;

7.            Realise that there is a lesson for you to learn here, so don’t take it lightly;

8.            Don’t blame anyone, you created your reality so you learn to resolve and sort out the problems;

9.            Get organized and take each day at a time , remembering it did not take you 1 day, 1 week or 1 month to incur this debt so by the same token it will not just vanish in the same time-frame;

10.          Train yourself to practice patience, perseverance, commitment and discipline;

11.          Don’t derail, stay on the track until this journey is over;

12.          Don’t get despondent, realise you have a duty to yourself, nobody else;

13.          Don’t go and ask advice from someone who has no clue or no experience because they can’t help you and quite frankly, they don’t like to be involved in such problems that does not affect their life and this is a fact;

Transparency, being honest with yourself and your creditors will serve you on this journey. I cannot tell you how many times debtors who come crying with their debt problems present their complete debt schedule, convince me that this is the entire debt and later I find out there are other accounts not included.

Like I said, you could not control your spending in the first place, neither your debt so what makes you think you can handle the others you slipped into the dark and did not want the creditor or remedial company to know about?

You become capable when you walk a straight path as there are no short cuts on this path, it also entails gruelling lessons and discipline, also a bit of suffering as I am not going to candy coat this scene at all because there are sacrifices to be made, without exception.

Unless it is a buy-out loan, where you don’t just secure liability letters from your creditors but you negotiate an acceptable final settlement discount, then it is worth your while and unless the EMI of your buyout is at least 50 per cernt of your current total EMIs, then it’s not worth approving the facility as it will not reduce your DBR, which is your ultimate priority.

Finally, forget about future credit; totally put it out of your mind for the next 5 years as most debtors have to do this long stretch to become debt-free. So, although it seems like a long time, for sure you will witness the improvements as you progress and start getting on with your new life because you will see your balances reducing, until they are each fully repaid.

So the question is why would you even give additional credit a thought that will serve no purpose? Are you not in enough trouble right now?