Ask SKY

[SKYDC]

One of my clients (well, actually all of my clients) had been experiencing debt problems. The banks were calling him regularly and took his entire salary from his bank account, further exacerbating his situation. His conversations with the banks were one sided and they were quite unsympathetic to his plight. He was advised by his bankers that debt counselling was a waste of time and would result in him never getting credit again. He was petrified. He became disorientated and detached. He read about crooked debt counsellors on the news and saw no way out.

We met and spoke. When the credit provider threathened him with summons, he took the risk and made an application for debt counselling. I have negotiated a repayment plan for him - which he has been paying to a payment distribution agency for the last two months. He has had to make some lifestyle adjustments - which he considers a small price for the relief he has got. The banks all agreed to the new plan the first time round and we are to appear in court to seek a court order very soon. I prepared all the paperwork and showed it to him.

This client is happy again and full of energy. He has sufficient cash to live a dignified life and is amazed by the process. He mentioned to me that when he heard about debt counselling he thought it was too good to be true and therefore must be a scam. The impression he got from the banks was that his name would be tarnished forever. He mentioned the stigma attached to debt counselling, and the constant news of crooked debt counsellors didn't do anything to mend the perception.

If you watch Carte Blanche Consumer, you will be familiar with the phrase "If it sounds too good to be true, it probably is". Take the normal ad for debt counsellors "50% OFF your payments" or "Don't pay for 2 or 3 months". This sounds too good to be true and is. Debt counselling does not work like that. Because it is constructed as a societal remedy for over-indebtedness, the consumers who are the worst off receive the biggest benefits. If you are over-indebted and struggling with constant anxiety and apprehension, then debt counselling will be of assistance. Maybe you won't get 50% off your debt, but you'll definitely get a better planned and organised budget and a more affordable repayment plan without any harassment.

What about your credit record? Well, once my clients debt is paid, I will issue him with a clearance certficate. The credit bureaux must then remove all record of his review and every negative record on every agreement that was included in the review. The bank employees create a poor perception of the Act because it is in their interest to do so. Consumers however, are very sensitive to these perceptions and because we see banks not as businesses, but as institutions in our society we are easily swayed by these perceptions. Some people never make the application for debt review, and are destroyed by the very banks who shape their perceptions.

I had a counselling session with this client and his family and it led to some very constructive choices. They are all doing well and the session helped to evaluate values and behaviours that created problems. Now they are adjusting to a different value system regarding consumption and finances which ensures their happiness.

I like to think that I own a debt counselling pratice, not a debt counselling business. I would structure it very differently if it were a business. When done this way debt counselling is a positively life changing remedy for consumers. Debt Counselling is not a scam.

This said, make sure you don't get scammed by fraudsters out there. Read the above posts and check out my website before you make any decisions. When you are vulnerable people will prey on you. So take a step back, do some research and do what you have to do with someone you trust.