‘Borrow-ful’ and ‘loan-ly’

Question: I am so stressed with the repayment of my debts. Almost every day, I receive phone calls, text messages and letters from collectors threatening to file a case against me for non-payment of debts. When I get to talk to them, they use harsh words that denigrate all my efforts to try and repay them. Sometimes, they even talk down to me as if I were a lesser being. Please help. I am close to giving up on life.—asked at “Ask a friend, ask Efren” free service available at www.personalfinance.ph and Facebook.

Answer: Firstly, when you reach the height of pessimism, always remember that you only need to get the “h” from height, the “o” from of and the “pe” from pessimism to see that there is always hope.

Next, you need to understand that collectors are but humans doing what they were instructed to do to keep their job.

Under our EnRich Getting Out of Debt or GOOD program, we talked to these creditors and found them to be kind once they take off their collectors’ hat and begin to empathize with you.

You just need to disarm them, and here’s the trick.

You need to first “lay all your cards on the table”, so to speak. Tell them that you have no means of paying them according to the scheme that they came up with. Then start with what you can afford with all unnecessary spending taken out and develop a repayment scheme. If the resulting repayment period turns out to be too long, ask for concessions.

Debt collectors and their principal lending institutions are usually more than willing to charge lower interest and/or write off portions of the principal only to collect on long past due debts. They are after all in business and they will be losing more money if they insist on unrealistic repayment terms. But you cannot stop them from first trying to collect as much as they can because they don’t know yet your full story; so, be ready to be initially rejected.

Just stand your ground on what you can truly afford and collectors, together with their principals, will eventually give in. This strategy, which some call an out-of-court settlement, is a win-win situation for all. No less than the Holy Book prescribed it.

Matthew 5:25-26 says: “Make friends quickly with your opponent at law while you are with him on the way, so that your opponent may not hand you over to the judge, and the judge to the officer, and you be thrown into prison. Truly I say to you, you will not come out of there until you have paid up the last cent.”

Remember that while Article 3, Section 20 of the Philippine Constitution says that “no person shall be imprisoned for debt or non-payment of a poll tax”, a case can still be filed against you in court if your creditors can prove that you committed fraud. To this end, document all of your communications to repay your debts to serve as evidence that you are not running away from your obligations.

Remember that these too will pass in your lifetime. Have hope, the kind of hope that is rooted in prayer and action. Eventually, you will transform from being “borrow-ful” to being joyful, and your situation from being “loan-ly” to being heavenly.