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Dangerous December

The end of the year is coming. This is a dangerous time for consumers in debt review and also for Debt Counsellors. Here are some things to keep in mind:

 

Dangers for Consumers

If you do not watch your spending you could find that you spend more than you planned as you get swept along in the holiday mood (and holiday gift shopping) that happens in December. Before you know it, you may not have enough funds to pay your regular debt repayment.

If you ‘short pay’ or miss a payment you face the danger of credit providers starting new legal action against you to collect debts, since you are not cooperating with the debt review.  You could lose all the progress you have made and even lose your assets. It will certainly cause you a lot of stress and great hardship. Please avoid this by making sure to watch your budget and spending in December. If you get paid early then try to pay your debts sooner.

Here is what happens if you miss a payment this December

Danger For DCs

Your clients may fail to make payments in December and you may need to abandon them and terminate your services due to their non-cooperation. You may also need to advise credit providers that this former client is not cooperating with the process. This will leave them without your help and send their debts spiralling out of control as creditors pounce. It will also leave them trapped outside the credit market for years or even decades. Reduced client payments can also affect your aftercare revenue.

Can you help your clients to avoid putting you in this awkward situation?

Your PDA system may enable you to send reminder messages via sms or email during the start of the month to warn them of the danger and to encourage payments. Some smaller DCs organize staff to call many clients and remind them to make their payments. Others ask clients if they would like to make their regular payment slightly early during December to remove the temptation to overspend part of their debt review payments. Since sales are normally slow in December you may find your team has the time needed to make some extra effort to help consumers stay focused during dangerous December.

 

This article was first featured in the recent issue of Debtfree Magazine