Personal Finance: Debtors do not fear; take action now

Theda Muller

Often debtors blame creditors for their harsh treatment, their tone over telephone calls, etc., as reasons why they do not approach them. However, even if creditors’ were to react effectively, there are debtors who do not take that step forward, simply because they live in fear.

Transforming the process of debt recovery for debtors is a process that will evolve over time, where debtors are only convinced when creditors lead by example, because any deviation from this approach will make debtors withdraw completely from their intention to seek an amicable solution. This is a fact as people are human, so changing their perception from negative to positive instantaneously when their entire existence is engulfed in fear, is going to be a tough task as the debtor will only go where they feel comfortable, where they know they are not facing personal well-being risks.

There are still creditors who treat debtors badly, who are harsh, demeaning and rude regardless of how debtors approach them or in how deep waters they are. I know this as I deal with these incidents every single day and my voice is for the people, for their well-being, for them to remain in the country, recover and thrive. And for local people facing this problem, to fully support them so they can continue to live in peace and thrive.

So why are some creditor’s still so harsh, demanding full payments of the outstanding when the debtor is clearly trying to make amends and is standing in front of the creditor for help? It is a pathetic situation to witness but it happens every single day and I am just wondering when those creditors will realise that they are in a position of strength and, therefore, are expected to help debtors instead of fostering bad stigma’s for their organisation, as it continues to give the entire segment a bad name.

Facilitating remedial action for debt-saturated people by reviewed their total exposure and projecting reduced overall EMIs and presenting those cases to creditors I often get the question ‘Why are customers coming to you?’ and then customers are asked ‘Why do you go to them, why don’t you come directly to us?’

The sad reality in spite of informing them is that before coming to us the debtor has already been to the creditor, but they do not receive the help they went seeking. This is trust, of gaining debtor confidence and not pushing them away when they approach for help. They come to us as we provide a neutral environment where we truly serve humanity, we treat them as equals not as people who have a contagious desease and we refrain from beating the old story as to why they are facing a debt crisis, as that is history where you cannot go back, you must look ahead!

What is crucial at the starting point is to instill a level of comfort but also highlight the seriousness and severity of their debt situation.

So the typical initial questions are:

    How can we help you with your debt problems?
    What kind of problems are you facing?
    Have you directly approached the creditor before coming to us?
    What is your current income?
    How much can you afford to allocate to your debt of this income?
    Explain the debt recovery process and secure their commitment

And then you have gained debtors confidence.

Debtors facing this problem are highly sensitive, embarrassed, and ashamed with a large degree of humiliation, as they have lost all confidence in their ability to recover from their debt crisis. So anyone who is in a position of strength, who values the fact and realize that if they fully support the debtor, they will be contributing to a very significant evolution in the cycle of finance -  which not only affects their jobs and organizations, but the country’s economy as a whole.

How simple is this way of thinking? Why is it necessary to impose harshness upon any debtor asking for help because this form of bad attitude is a trigger for other negative action that the debtor will be forced to take and if you look around at the numbers you will realise that much of the outcome today, is a result of this bad attitude.

I am sure debtors are grateful for new policies of leniency and support announced and implemented, however, not every creditor is conforming, because it appears that the responsibility of meeting targets regardless, is still a pre-requisite and takes priority. So also, the queries ‘how did you get in debt’ and ‘what did you do with the money’ do not serve any purpose.

Be assured there are many debtors who will step forward if they know they will receive support. Debtors, especially SMEs, really want their businesses to evolve and they are committed to repaying their debt, but their hesitancy is due to what is explained herein and that must change fast.

Policymakers have authentic intentions. But the problem is with middle managers who consider themselves infallible.

We live in a beautiful country where we are safe and secured, where the power of money exists, the power of recovery does not have to be a long process when you have the earning potential to recover, where you get full support from policy makers and where life can continue to be bliss.

So, learn to be respectful of debtors. When they step out help them take ownership and responsibility in spite of their delinquency levels, then take your hat off!

[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.]