New 'tough love' strategy to get you out of debt

[totius54]

Why must we act in good faith when the creditors and banks do not.

They all claim that you will get assistance from them should you have problems.

Not so ,They do not act in good faith. The last thing you must do is tel them you are in financial difficulty they will freeze all your credit they will even take funds out of your account without permission.

Make sure you have accounts in at least 3 of the major banks. Do not take the risk in putting your salary in the bank your home loan and credit cards are with if you are going to default they will grab the moneys out of your account with out permission.

Nobody is going to feed your family , You take the necessary measures to look after your family.

Then negotiate with the hyenas

[Jaq]

The formation of the National Debt Mediation Association (NDMA) is an interesting development.

While the NCA allows this type of mediation as a solution to debt problems, the danger is that this organisation will mislead the uneducated comsumer about their rights.

One should not forget that the NDMA will act mainly in it's members' own interest, and not neseseraly in the best interest of the consumer. The same is most likely true of "Affiliated Debt Counsellors".

In fairness, it is also true that it is not in their own interest to have a consumer forever caught up in old debt, since they want to make money out of selling your new good and services, and cannot do that while you are under debt counselling.

With regard to the fee that a Debt Counsellor is allowed to charge: I thinks it's fair that the debt counsellor is paid for his/her services, but I also think that people who go that route, do not have that extra R3,000 to pay.

The National Credit Regulator (or the Minister) should perhaps again look at this initial fee.

The 5% and later (after 24 months) 3% commission should be seen compared to the 10% one would pay an Administrator or laywer on collections. (if I don't have the figures wrong) Also remember that fee/commission is capped at R300 a month.

I think most of us have to take the blame for our own debts. There is a percentage who get into trouble due to loosing a job or some unforseen sircumstances, but in general I don't think it would be wrong to say the we get into trouble by living above our means... living on virtual money.

btw, I think it is good that QUINN reminds us that some actions we consider to get out of debt could land one in jail. (like hiding assets when sequestrating or in a company liquidation)

When one is in a tight spot, the temptation is big to try things that can get one much deeper in trouble.

Creative legal sollutions like so-called "friendly liquidations" are also now frowned upon by our courts.

disclaimer: i have no legal or financial training

[Marq]

Totius - I am confused

Your first post here - you tell us about save the company and tough for the staff.
In your second post its tough for the companies and you as a family (same as your staff) need to be saved.

It is common knowledge that the bank will lend you an umbrella while its sunny and take it away when its raining, yet we complain when they actually do it t us personally. Why have these expectations when you know they will not help you and are only there to ensure their assets are secure?

As for creditors - they have provided the services or goods up front based on some payment terms. How can it be that they have reneged on anything, just because they would like to receive what is due and keep themselves from being roped into your situation?

[totius54]

Marq : the two issues are totally differant
(1) The company( generating wealth, its clients base other companies) must look after it self . If it become necessary to reduce staff it must do so.
(2) The individual needs to take the necessary decisions to make sure he can look after him self and his family.