Have you ever given a homeless person part of your lunch out of concern that they are hungry, only to be horrified when they reject it or worse, throw it away when they pass the next rubbish bin? It can be a real kick in the gut and makes you more than a little angry and disappointed in people in general. You can’t help but think the person ungrateful and bemoan the loss of a few more bites of your cheese and tomato sandwich. Sometimes this is how Debt Counsellors feel about their own clients.
Debt review can help consumers deal with their debt in a dignified way and helps credit providers get their money back in a reasonable time frame. It is a great process that works well and can help over indebted consumers get back on their feet. The service is so good that it is very troubling to those in the industry when we see the high number of people who start the process but never finish it.
We understand that many consumers who enter debt review might do so without thinking things through very well and may do so, somewhat, on impulse. This means that later another impulse may make them want to ruin their debt review and financial future by abandoning the process before it is done. We get that but…it is frustrating to credit providers and Debt Counsellors alike. We would like to see people get the help they need and pay off their overwhelming debt. We want to see people use the process to start a better future for themselves and their families.
‘We want to see people use the process to start a better future for themselves and their families’
The stats, however, show that within some companies, as many as 20% of the clients who sign up drop out within the first 60 days. That’s a lot of work for sometimes no money and it means that 20% of these clients are stuck with a debt review status at the credit bureaus and are thus unable to go get more credit (the truth is that they wouldn’t be able to pay reliably for it anyway and so wouldn’t get new credit anyway but…). These drop out consumers then cause a lot of ruckus and extra work for themselves, credit providers, the NCR and Debt Counsellors. It is a real strain on the industry.
‘Obviously then, the process itself, which works so well, is not enough’
An even larger number of consumers push past the first two months only to drop out later and face some pretty big issues as a result (like demands for huge amounts from collections agents and legal action on arrears debt). Obviously then, the process itself, which works so well, is not enough. This issue of Debtfree Magazine we look at why this is the case and what consumers, who are under debt review, can do to improve their chance of completing the process and getting the full benefit out of the program. Debt review can be a huge turning point in your life for the good if done in conjunction with some other basic things. We look at some of these basics in this issue.
We also have some Debt Review School lessons, news stories and other features which we hope you enjoy. So, don’t give up on helping the disadvantaged. Never stop helping others. And if you are getting help through the debt review process, don’t give up either. Help yourself. Keep at it from start to finish. Time flies and before you know it you will be debt free.