How do you prioritize debt?

Well, you look at the most important one, the one that will lead to more problems, knock on effects. A lot of clients, we have talked to us and we tell them that you’re going to lose your license because of the fact that you’ve been made bankrupt or you go on an Iva.

Then really, you need to be clear, do you want to continue practicing for that time? You may have to lose the license, but have the freedom to do what you want in dealing with your debt problems?

So I’m going to do a quick last summary of everything. This is just a very small glimpse of debt and what it entails. So we covered the various types of debts. We have secured unsecured, and both debts have different implications. Remember, the application of a secured and unsecured debt has different connotations to the lender, how they can recover their money.

When you have collateral charges or legal charges across assets, it gives strength to the lender. Once it’s unsecured, it becomes slightly more in favor of the borrower. But then the amount of money is different. You can’t expect to be taking $100,000 credit card overdraft or whatever without security.

But at the same time, there’s lots of funny things that happen in the banking system where somebody who’s got are IP status is a well known footballer or sports star or somebody who’s in the limelight in the public. They can be given silly money by the banks because of who they are. Well, if that be the case, then where does the credit file go?

And where the knowledge of the person who may be a VIP does is not person is good at money management. So I think the banks do play the system somewhat against the individual’s Fame, and Fame itself gives you credit.

So if you want to have exceptional credit line come famous, that’s the quick, short rule of it. But if you want to be just like everybody else, normal, ordinary. I think it’s very important that when you try to give support to somebody who’s got a debt problem, you must try to be extremely pragmatic in your approach and not be emotionally drawn in to the impact it has on that family or house, because that is something that nobody else, apart from the debtor, can actually absorb and giving them support and giving them comfort is the best you can do.

People have a habit of finding their way through things and I think the rule should be that we support and help, but we should not indulge. We should not direct anybody who’s in debt problems. Why?

Only they know what is important in their life. Certain circumstances when people are getting their children married, certain cultures in this ethnicity, marrying the daughter are a parental responsibility. There’s a lot of money being spent on those marriages. They may bear the pressure of more money taken on to make sure that the function is as good as it can be.

Nevertheless, all matters put aside. We should be very clear in how those matters are dealt with. Once you gain the comfort of your friend or family member within debt, you really need to be referring them to specialists. People understand the implications of debt, what could and could not happen. You should be looking at policy, alternative sources of funding where the individual has got bad credit but money can be obtained.

Now the worst situation you can get yourself in is to take good money and throw it after bad money. It’s not always a good rule. People like to have that feeling of I’ve got another six months now to pay the debt back, but ultimately you are going to end up at six months not having any money available to pay the original debt off. So being pragmatic is extremely important.

Learning to talk to the lender, picking the phone up and talking to the lender opening is very important because it allows a lender to recognize that you are in contact and you have realization of their debt. Call us if you need help on this.

Once debtors start putting the screens down fail to communicate, What happens then is that the credit just gets nervous and in order to avoid nervousness, good communication is an excellent tool to use because it gives all parties confidence that everyone’s on the same page.

So to summarize today I will say debt and debt problems and helping friends who are in debt is a very, very important thing. It’s a very difficult thing. An important thing that you could do for your family member or your friend. So over the New Year, this holiday period that you do have, some of you will be out work, some of you will not.

I think the good thing to do is look at that and look at your family and friends. People who are in difficulty somehow try to give them a better support and some better support doesn’t need you to be the Governor of the bank of England to come out with a brief case of money.