As a professional helping others with their debt problems in the current economic climate, you meet a lot of different people. Some of these people are talking to you about their debts for the first time, others have had some unpleasant experiences, but whatever stage they find themselves at, they all share a common connection. These people have acknowledged that they are in uncontrollable debt and they need to do something about it.
My colleague Nick Leeson wrote a book in 2013, in which he discusses the five emotions distressed borrowers typically feel. He talks about Denial, Anger, Bargaining, Depression and Acceptance. Depending on how you feel about your debt right now, you might find yourself at one of these stages, but please don’t panic, once you ride the emotional roller-coaster and reach acceptance, there are options available.
Once you accept that you need help, the most important thing is that you get the right information from the right people. There are a number of free and paid-for services available for distressed borrowers. Either way, I would recommend a professional organization that is regulated by the Financial Conduct Authority and who has substantial experience in this work. They should be able to give you actual examples, on a “no-name” basis, of borrowers that they have helped.
It has become more common, unfortunately, in this field, that there are a growing number of faceless organizations claiming to be experts in distressed debt; however, they do not even provide the bare minimum of information through their literature of who their professional team is and, more importantly, their range of experience and professional qualifications.
We recently met an individual in Belfast who was told to “hand the keys back and we will get the bank to write off the balance of the monies owed.” This sounds great and very simple, but it does not happen, unfortunately. It appeared that this particular company were taking a flyer at this case, had little to no understanding of the policy of the bank in question, and bottom line, giving out the wrong advice. This is extremely dangerous and can have a very negative impact on the client and their family for years to come.
This is only one example. I have spoken to many distressed borrowers in the last 18 months who have been given similar peculiar advice from otherwise seemingly reliable sources of information. We at GDP take the view that if anyone finds themselves in a difficult position regarding debt, it is incumbent upon the advisor to explain the situation In full, the process in full and all the options open to that party, not just some of the options.
Marcus Tullius Cicero, one of the great Roman philosophers, stated that “Nobody can give you wiser advice than yourself.” This is true, as all the decisions we take, we take ourselves as they affect ourselves. As a result, the more knowledge you have on the subject of debt, the more empowerment you have to give yourself the best advice and make the best decisions for you and your family. Accordingly, whilst you make your own decisions, the source of your information is key. The way to stay ahead of the game is to always and only ever make informed decisions when you have all of the information available.
I once sat in an accountancy class at Queens when the lecturer sparked a discussion on how his friend, also an accountant by trade, had spent all day frustratingly changing the oil in his car. The lecturer went on to say how this was such a waste of time. Some protesting students failed to understand his message: his friend was not a mechanic, this was not something he did on a daily basis. A mechanic would have known what to do and would have had the job done in a fraction of the time whilst the friend could have focused on spending his time on doing what he does best.
The point is, when you are in debt you should seek professional help to ensure you know all the options to make the right decision. Whatever you do yourself, you should focus your energy on being the best you can be and let the professionals do what they do best for you. Too often I have heard people say “the business was going well until I started becoming anxious about repaying the debt, my health suffered, I got depressed and… here is the bank's solicitor letter for full repayment.”
Let me leave you with a simple plan to remove the anxiety and stress of debt from your life: seek professional help to know all your options, make a decision, prepare a plan, implement the plan and stick to the plan. If your proposal is realistic and solution reasonable… welcome to a stress free life.