Personal Finance: What to do first when facing debt crisis

Over the years I’ve repeatedly furnished debtors with this critical information in a myriad ways in my articles, where I know when someone is facing a debt-crisis, it takes time for this to ‘sink in’.

Hence they simply continue ignoring taking action and responsibility, so the situation spirals out of control as their survival is linked to timeous action, period.

Much of the problem is also linked to this dire lack of perseverance once on this road, as debtors tend to start to ‘get smart’ once they think they learn’t the rules so they embark on their own journey, without realising they have not afforded themselves the time to transform their mind-set.

Today, I present a guideline in a different format, perhaps in a way that resonate  with you more because the points list is a sure reality of what anyone faces when hit with a debt-crisis:

Take stock of all of your debt right now because I know you have an idea but not the complete picture, due to your state of mind and emotional fear within.

Remove that ‘imaginary’ mind-set that:

-        It does not exist.

-        It is not as bad as it seems.

-        You will eventually get around to do it ‘when you have time’, which I know is NEVER!

-        You’re first depending on family or close friends to revert to you for the monetary help you requested –

Remember, you don’t dig another hole to close one where most of the time your debt-crisis outcome was due to this action.

Open the post/bank statements you’ve accumulated for the last year that you have not opened yet and familiarise yourself with the financial details.

Respond to creditor calls and emails whenever you receive them even if you inform them that you are just busy reviewing and planning your next port of action on your debt-situation and that you will contact them at a specific time and mention that day or date as they will record it on your file.

Refrain from being rude, negative or derogatory with your creditor at all times.

Show respect because now is the time you must recoup and rebuild your own self-respect and integrity too.

Be nice, it will change your situation and mindset when you see how much niceness is returned in your favour.

Compile your debt-schedule with all the headings so you know exactly where you stand.

Take advice from professionals, not friends or people who have never been in debt because this is your life so you need the best advice for you.

Drop the facade, learn humility and it doesn’t matter that you ‘can’t keep up with the Jones’s’ as the very popular phrase goes, because if you don’t have the money then you cannot afford to spend money you don’t have just to maintain a certain standard of living. It’s just the way it is, learn to accept it and to live with it as it will be your new way of life for a few years.

Sell whatever valuables you have, move to a smaller home, sell one car of the twi you have where the point is, material things can be acquired again but if you need the money, this is what you should do.

Don’t hang onto things that you don’t need and does not serve you in the moment you need to close a few holes.

Go to the internet, browse self-help personal emotional release practices to get yourself mentally prepared before you action your schedule with your creditors. Now you know where you stand, your exact situation so the next step is to start meeting with your creditors and have all of the official documentation ready that is required for you to discuss a solution for your problems.

When you don’t take physical action, nothing will change.

You must get up and move and not stop until you are satisfied that you can manage those new payments and be on your road to recovery.

[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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