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In the Spring issue of Debtfree DIGI we featured the pithy letter of Cape Town Attorney Keegan O’ Connell,

Here is an extract from the letter which can be read in the Sept 2012 issue of Debtfree (above):

” Debt is a world-wide phenomenon, glorified by banks in the form of credit cards, personal loans, mortgage bonds and the like. Using media marketing as a launching pad for idealistic representations of the financial freedom that an overdraft, credit card or loan can bring, the banks publicize an “acquire now, pay later” mentality.

Perhaps some may find that description a little disparaging, but the fact remains that we find ourselves in a world wide credit crisis. As Mark Twain said: “A banker is a fellow who lends you his umbrella when the sun is shining, but wants it back the minute it starts to rain”. To continue on the same tack, not only is the banker going to want his umbrella back, but he knows when the rain will start and how many people will be caught in the storm.

Through experience, statistics, projections and financial analysis, the banks can accurately predict figures as to non-payers and defaulters, on an annual basis. This is how they assign a budget in the form of legal costs necessary to regain ownership of that metaphorical umbrella, be it a house, car, lounge suite or television.

It is at this point that the banks no longer ask: “How can we help you?”, but rather: “How can we help ourselves?” And the promise of: “Today, tomorrow, together” seems to fall away just as tomorrow begins to dawn, leaving the consumer to wonder why that family in the advert promoting personal loans looked so damn happy. That must have been the “today”, when they were enjoying their credit funded holiday, preceding the “tomorrow” when petrol prices rocketed and inflation leapt forward, making those interest drenched repayments incredibly difficult to maintain. I certainly believe that necessary debt is manageable. However, unforeseen and unpredictable financial burdens and occurrences such as job loss, retrenchments, death of a bread winner can thrust one into an unmanageable debt trap.

This is the stage at which the bank’s seeming “nemesis”, the Debt Counsellor, steps in to offer that help and to see the consumer through that tomorrow, to weather the storm and salvage the umbrella. But what if the Debt Counsellor and the bank enjoyed a more harmonious relationship? What if, instead of opposition to debt review applications the bank, upon receipt of the notice of motion, or even prior thereto were to approach the Debt Counsellor and quickly agree on a revised payment structure? What if the Debt Counsellor were to take the debt review order by consent on the first set down date at court?

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The big question is If this is a great idea then how do we get the banks on board?

 

To read the full article and see what Keegan’s great idea is read the Sept 2012 issue of Debtfree DIGI right here at www.debtfreedigi.co.za for free.