Reading Time: 6 minutes

Conquer Debt Review as a Family

When some consumers approach a Debt Counsellor for help, they are often concerned about how other people will think about them if they enter debt review.

This is interesting since taking on more and more credit allows them to hide the fact that they are in financial crisis and spending more than they earn. That, of course, will just make the situation worse though. People often fear that getting help to get rid of their debt, might be seen by others as a weakness, as a sign of failure. In reality, carrying on as before and taking on more debt would be the real failure. It has been said that when you use credit, you are selling your future. So, taking control of the situation is a big move towards true success.

Consumers often ask if the entire process can be kept a secret. They do not want their boss, family and friends to find out

Depending on how severe the debt situation is, it is relatively easy to prevent an employer from ever knowing about a consumer’s debt review. But can debt review be hidden from your family, and is that actually a good idea?

Secret Debt

Sometimes, one partner will start to take on extra debt without telling the other. As the debt grows, they make an effort to hide it from their partner. This may happen for a variety of reasons.

There may be a well-meaning desire to shield their partner from any additional stress relating to more debt. They feel that keeping them in the dark about the true situation is a kindness.

Some couples also hand over total financial control to one partner, and the other just goes along in blissful ignorance of the finances.

Secret debt is also very common in relationships where partners talk about “your money” and “my money”. Low levels of trust and commitment can result in a separation of finances that lasts for years. In households like this, there may only be very short discussions about money and this results in a serious lack of budgeting.

Some consumers have challenges like drug or alcohol abuse or even gambling addiction. This can also lead to secret debts that are never discussed. Often credit is relied on to hide the debt.

When You Can No Longer Hide the Debt

When a family experiences a serious financial obstacle, like a medical emergency or when one partner loses their job, this situation will now force them to think about how to make ends meet, and still cover all their debt repayments. The resulting ‘collections calls’ and ‘threatening letters’ will cause massive stress.

Money stress puts huge emotional and relationship stress on families, and things can get very tough very quickly. Parents start fighting and the kids get exposed to a lot of negative emotion. The situation is less than ideal. Fortunately, many people turn to a Debt Counsellor at this point and wisely ask for some help.

Hiding Debts From Your Debt Counsellor

It is at this point that one partner may secretly contact a Debt Counsellor and ask that their debts not be disclosed to the rest of their family.

In debt review, it is important that ALL debts, big and small are included in a debt review (including loans from mashonisas or loan sharks and even family members). The Debt Counsellor will ensure that each and every debt is settled, over time, and can even help with things like garnishee orders (EAOs) by taking them into account in the monthly budget.

Hiding any debt from a Debt Counsellor is foolish. It is like not telling your doctor about a serious symptom because you are embarrassed about it. Keeping this information from them can cause your entire debt review to fail!  It is also not practical since they will eventually get access to your bank records, salary slips and credit bureau records which will show all your debts.

No More Secrets

Though it can be an initial shock to find out that your husband or wife has secret debts, it can help you understand the reason for their stress.

Discussing the reasons why the debt was hidden can also help you draw closer, although it may sting at first. The key is to do so in a calm and respectful manner, and not to play the ‘blame game’. Getting a true understanding of your debt situation is the first step in making plans to get out of debt. It is like the difference between driving on a dark unmarked road, with no idea of the destination compared to driving on a well-lit highway with signboards telling you how many km’s to go.

Couples who are married in community of property (COP) share all debt equally regardless who took on the debt. Each partner’s debt is also the other’s debt.

Couples with a contract (ANC) do not share debts. But they do share resources when it comes to money coming into the house and buying food or paying for electricity or rates. Like those who are married in COP these need to reflect in the court order.


How Much to Tell the Kids

Your kids probably surprise you when they suddenly quote something you always say or copy one of your mannerisms. It’s cute, buy can sometimes get you into trouble i.e. “Mommy says you are hairy like a gorilla”.

The truth is that your kids are a lot more aware of what is going on than you realize. They may not fully understand everything, but they will certainly be picking up on the emotional state of the family. If you are stressed about debt or how much money you have available, they will be feeling that.

Depending on the age of your child, you should seriously think about discussing the families’ financial situation with them. This will help them to prepare for the changes that must follow. You may need to move to cheaper accommodation, you may end up selling a vehicle or have to give up those big annual holidays you always used to take. By letting them know enough to manage their expectations, you can remove a lot of potential frustration from both their and your future.

Don’t scare them, rather inform them. Your kids may surprise you by their willingness to make changes to help out.

Working Together Towards a Common Goal

Team sports are fun because you collaborate to achieve goals. Dealing with debt as a cohesive family unit can also bring satisfaction.  Sure, entering debt review and changing your focus from making more debt, to reducing your debt is a big swing. The change to a cash-only-lifestyle is not easy. That’s why the process comes with Debt Counsellors to help you work through the obstacles that will come up.

Working together to reduce spending, is the best way to cut costs. A good Debt Counsellor will talk you through good budgeting tips that will help. You may even find, that while you cut some things out your budget before debt review to try to save money, the Debt Counsellor now adds in other things you have been neglecting.

Suddenly you may have savings each month to put towards servicing your car or replacing the tires. This keeps you and your family safe.

Your Debt Counsellor may help you set funds aside for medical needs that you may have neglected since funds were not previously available. These things can really benefit your family.

Having monthly family finance evenings (with some fun food) can help you keep track of where you are as a family. It can bring you closer as you track your progress together.

Conquering Debt as a Family

If you stick to the process and make sure to save, according to your Debt Counsellor’s suggested budget each month, you will be able to work through other financial challenges that come your way during your debt review.

As you learn to stick to a realistic lifestyle, you will spend more time together as a family. The secrets and lies will disappear and you will draw closer as you work together against this common enemy. The stress of trying to deal with debt alone or in secret disappears and is replaced with a sense of building future wealth.

It is unrealistic to expect the whole journey to be sunshine and roses, but things will be better. Your family will be stronger.  When your debts start getting paid off one by one, and you eventually get to the point of receiving your clearance certificate you will be ready, as a family, to tackle the next step of creating wealth together.