Personal Finance: Debtors beware of 'experts'

Theda Muller

If you are a 'debt advisor' or you are on a debt panel helping debtors face a debt-crisis, then you should understand that your response, if incorrect, will have a dire impact on debtors, perhaps even crushing their hopes.

When in a debt-crisis, regardless of its magnitude, one goes through many psychological states. So even one wrong information you tender, could trigger the most negative action from the debtor. Debtors hang onto every word of advice you give or utter because you presented yourself as the expert. You are their last hope. And you cannot let them down. You are dealing with people experiencing emotional turmoil and fear.

It is not your job to beat that story of how they got there and how they should not get there in the future, because at present they only care about getting out of the situation at any cost.

My advice to debtors before reaching out to secure advice from any advisor is to maintain a clear mind that if you are negatively impacted with the advice, don’t take it personally. Simply understand that it is your right to ask anyone who you think is qualified to tender such an advice. However, receiving a negative outcome does not mean it’s the end of the world. Move on, and continue seeking help and advice. As a debtor, you ought to feel comfortable inside once you get that advice, so follow your intuition, always.

My advice to debtors is to live by the following code to ensure you win the battle:

* If you are scared of the situation right now, if your entire being is engulfed in fear and uncertainty and you don’t know where to turn, then remember it's you who created this situation. So it's only you who can remove it because you have the inner power to do so. Take an hour right now, unplug and go find a peaceful place where you can sit and think about your future dreams -  what you wish for and make the commitment to yourself to take ownership of this debt, followed by action, with zero delays.

* There is a solution for everything, even debt. The tunnel does not stay dark forever. At some stage, after taking action your situation must ‘shift’ into a better positive space. Take small steps, one day at a time. Remember, you did not accrue this debt overnight, so it won’t dissipate in one day, have patience, learn to control your emotions with the knowledge that whatever we fear happens, regardless. So you have no time to think negative and bad thoughts. think only positive, look ahead at a new future and you will see progress.

*Don’t depend on anyone once you have taken action, do everything yourself. Directly approach your creditors, secure a meeting and present your situation honestly. Tell them what you can afford to pay and stay committed to the new arrangement.  If you are still uncertain, find a reputable remedial company that specializes in debt restructuring and consolidations. But ensure you are comfortable with them and go with your intuition.

* Prepare a debt schedule so your debt-crisis is right in front of your eyes- You compiled it, you can see it, so you now know the true facts. Absorb all this information to familiarize yourself so you are prepared when you meet your creditors.

* Focus on your mission now as your only job is to set your debt recovery journey into motion.  Open files for each account and maintain all statements, payment receipts and official legal correspondence from your creditor as you must remain updated at all times. This is how you gain clarity of your situation which is key to this process.

* Learn new habits to transform your life. Formulate a daily programme for yourself while you are going through recovery  as there are many self-help tools available online that costs you zero but will help you maintain a sound level of positivity and encourage you on this path.

* Follow-up regularly as to the current status until you secured your restructures. Make a note, keep a diary and record all these incidents as you are not a computer to remember all and if you recall when getting into debt, you never kept records so now is the time to change all those bad habits. This in itself will cultivate a new being with new habits, new routines with the will and determination to complete the recovery journey. When you follow new habits that make you feel good then nothing is an effort anymore as you move from being depressed into being a determined person with will power and filled with positivity.

* Finally there is no better taste than success and overcoming hurdles. So share your experiences with those in need once you have progressed well, be positive, reach out and do good deeds as they will come back to you in a way beyond your imagination. Maintain your new EMIs and if any problem or delays occur, advise your creditor so you maintain your credibility.

Only if we realise that everything starts and ends with us and learn to transform our own lives, can we change. And it does not matter how many people you ask advice from or reach out to, it will remain unchanged because only you have the power to change everything. It starts first in your own mind.

[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.]