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Enabling can be disabling

After nearly 15 years in credit management and almost six in the repossession industry I have noticed a few trends. One of these is that people will not learn from the consequences of their actions if they do not have to face them and taking away the ability of the debtor to deal with the matter as soon as possible does not help them in any way.

Time after time we pursue a debtor for either collection or repossession only to be blocked by a well-meaning parent or family member, who knowingly shields the debtor from speaking to us thinking that they are doing them a favour. This could not be further from the truth.

You see, generally the longer a debt is outstanding or the more work that is involved in locating the debtor, the higher the fees and the more serious the potential legal consequences.

Often expensive court action is required where a simple and inexpensive phone call or field visit could have resolved the matter.

Another well-meaning but ultimately damaging action taken by people, particularly parents, is repeatedly bailing debtors out of debts and then expressing surprise when more debts crop up.

“If you take away the pain you take away the lesson” is a saying that a good friend of mine says often and I feel it is very applicable here.

The only lesson that is learned from not having to deal with the consequences of poor decisions is that poor decisions have no consequences.

I have seen parents literally bankrupt themselves bailing errant adult children out of a string of debts. Whether this be out of a sense of shame, guilt or obligation it does not help and this is made obvious by the behavior repeating itself and the pain shared not reduced.

The only lesson that is learned from not having to deal with the consequences of poor decisions is that poor decisions have no consequences.

 

Suggestions for scenarios

After seeing how hundreds of the above scenarios have panned out, here is my suggestion.

Instead of helping a debtor avoid a debt or paying it for them there is a way that can achieve the goal of the debt going away or at the very least limit the extra costs and interaction with lovely agents such as myself and my colleagues.

Encourage the debtor to run a free credit check through www.mycreditfile.co.nz or www.creditsimple.co.nz and take this to either a budgeting advice service or contact each creditor directly and offer a payment plan.

You will both be surprised at how nice and accommodating creditors can be once a debtor makes contact offering a payment plan.

No matter how small the payments are, as long as it is reasonable, this way not only is the problem confronted head and the anxiety and stress reduced the lesson is not lost, which will make it less likely for the situation to reoccur.

Just a thought.

Nick Kerr
Nick Kerr is a Business Advisor at NJK Advisory Ltd. He is also director of International Private Investigations Ltd. Nick can be reached at nick@nzipi.com

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