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Monday, May 31, 2010

Don't be stupid

Many people struggle with their finances for a long time before approaching a debt counsellor. Then after entering the debt review process they have a great feeling of relief. Their assets are protected and life is good.

However years of bad financial decision making is hard to put behind oneself even with the help of a Debt Counsellor working out a monthly budget that will allow for the consumer to make the required payments to their creditors all year round.

And so it is that Debt Counsellors sometimes look on in horror at the plain stupidity of decisions that their clients make.

It normally manifests itself in the client not paying the full amount that has been arranged/negotiated and submitted to the courts. The Debt Counsellor now sends an email or makes a call to ask if everything is alright.

Here is where the "stupidity" manifests itself.
Debt Counsellors here stories like:

Well, i had to throw my daughter a BIG 21 birthday party and we had to hire a pony...
or
Well, i decided to do a course through UNISA/Damelin
or
Well, i don't want to pay toward my debt with X creditor anymore
or
My house was looking really bad so i hired a company to come in and paint it

Now why do we call it "stupidity"?

Well, imagine if painting the house is what causes the creditor for the home loan to withdraw from the process and have the house auctioned of leaving hundreds of thousands of rands debt in shortfall. Maybe the consumer could have saved up for a few months and then painted the house themselves. Maybe they could have arranged a cake sale or garage sale to help come up with the funds to buy the paint.

A missed or reduced payment is not part of the agreement or the court order thus by paying (or not paying) this way the consumer has broken the agreement. Now while sometimes there are very legitimate reasons for short payments (such as medical emergencies or income issues) the DC has normally sat with the client and discussed up coming costs and helped the clients plan for the months ahead in their budget. Thus there should be no surprises.

Clients often know that they are being "silly" - that is why they do not call the DC in advance and discuss their plans to "head off to visit my family for a break" which will cause them to miss a payment.

However the DC's job is to help people make a plan..if the consumer does not wish to stick to the court order afterward (even though they said they would) well...that is the consumers decision. Debt counselling is not a process that takes all responsibility away from the consumer. Nor does it help consumers abuse or take advantage of creditors rather it presents workable plans for both sides of the debt equation. However it would be a great pity where a consumer to find themselves back in financial straits over a "stupid" choice.

So:

DON'T BE STUPID.

:-)

Wednesday, May 26, 2010

ABSA Contact Centre

ABSA have introduced a team to attend to all Debt Counselling related calls within a contact centre setting. They hope this will allow for effective and efficient query management. The Contact Centre will officially go live on the 1st June 2010, and the following number 0861 005 901 will be activated.

Tuesday, May 25, 2010

Live within your means

Credit is a sometimes wonderful; sometimes terrible thing.
The major advantage of access to credit is the ability it gives us to achieve instant gratification. The major draw back is if poorly managed it allows us to extend ourselves beyond our means to repay.

Maybe the problem lies within the major advantage. Instant gratification - while...instantly...mmm... gratifying does not always mean the most sound financial decision.

When shopping ask yourself: do i need it?
One way to see if you need something when you go shopping is to make a list of all the items you need to buy before you get to the shops. This can help you avoid impulse buying. Impulse purchases may make us feel "nice" or give us a sense of temporary joy however they are often unnecessary things. Ever wonder why shops now make you queue between rows of sweets... because if you stand there long enough looking at them you will upon impulse just add one little snack for yourself.

Whether under debt review or debt pressure one key to success in dealing with your situation is to adopt a mental attitude of living within your means. Plan ahead financially and stick to it. Do a budget, monthly if necessary and stick to it. Budget in the snacks too if you must but then stick to your plan and live within your means.

Sunday, May 2, 2010

the Credit Ombud

If you are having problems with a Credit Provider you can ask the
Credit Ombud to assist in resolving the matter.

The first step is to Lodge a complaint with the credit provider

Give them time to try sort things out
(20 business days is the industry standard).

If your complaint is still unresolved after 20 business days, or if your are not satisfied with the resolution by the credit provider, then you contact the Credit Ombud at 0861 66 28 37

The complaint will be checked against the jurisdiction of the Credit Ombud (CO). The CO will facilitate the resolution of the dispute or make a ruling.

If you are unhappy with the outcome you may escalate your complaint to the National Credit Regulator or take other alternative action.

You can even complain online if you would like.
For more info head to: www.creditombud.org.za