When the sun stops rising

Question: It looks like I am at the end of my rope. It is getting more and more difficult to dodge the debt collectors. I am just an employee with no means of earning additional income to pay my creditors. My application to borrow is always denied and my relatives and close friends do not have the capacity to lend me money.  Please help.   –asked at “Ask a friend, ask Efren” free service available at www.personalfinance.ph and Facebook.

Answer:  The first thing you should do is smile. Yes, smile because it will go a long way in providing you a positive outlook in life. Smiling helps produce endorphins, the body’s natural muscle relaxant. After all, Article III, Sec. 20 of the Philippine Constitution provides that “No person shall be imprisoned for debt or non-payment of a poll tax.” But that right does not apply to those who intend to or has committed fraud, which are covered by other laws.

Next, do not dodge your collectors.  Confront them.  Debt collectors are people too.  They may be following a standard script when they come calling but they also have hearts that melt when they see human suffering.

In confronting debt collectors, be honest and show them all that you’ve got.  Tell them it is in the interest of all that a debt restructuring arrangement that is affordable to you be struck.  In asking for debt restructuring, also ask for a discount on your outstanding debt.  Debt collectors and the lenders they represent will initially turn down your request.  But keep at it for they will eventually give in if they see your sincerity.  This is also one of the reasons why you should learn to smile first, so that you can show your pearly whites as a sign of your sincerity when you meet up with your lenders and their collectors.

How much of a discount? As much as you can get.  We had an EnRich™ GOOD (getting out of debt) client who had an outstanding balance of P71,000 that was past due for two years. His lender initially balked at the idea of giving him a discount.  Our client relented.  He eventually wore his lender down.  And guess what, they asked him to pay just P9,500.

Asking for a discount also works for large amounts. We had another client who was given a 50-percent discount on his P1.5 million debt.  And there are more clients of ours who were given such huge discounts on their debts.

As mentioned, work for a restructuring arrangement that is affordable and sustainable for you.  It will do you no good if you agree to any restructuring package just for a temporary relief and default on payments again.

The sun never stops shining, literally and figuratively. This is because even in the height of pessimism, you just need to get the “h” from height, the “o” from of and the “pe” from pessimism to arrive at HOPE.  And know that hope has a divine origin. So, in all your efforts to manage your debt, fervently pray for guidance and blessings. Finally, do not forget to give thanks even before you start working on fixing your debt concerns as your prayers will most definitely be answered.

And if we do meet in person, I would want to see you sporting that smile.