I am bad with money. No, I am ATROCIOUS with money. It’s almost like I don’t like it, I spend it so fast. And I love credit. Really, REALLY love credit. And credit loved me, for a while at least. Then I couldn’t pay back my creditors, and then they didn’t love me so much anymore.
I first started considering putting myself under debt review in the July of 2009. I was 5 and a bit months pregnant, and I was in serious financial trouble. I had missed 1 payment in December 2008 on one of my clothing accounts, and it all spiralled out of control from there. I just couldn’t catch up. I was never out of debt, but I was always able to pay the minimum instalment, and kept everyone happy. It was so bad, that one creditor used to phone me on my cell phone anywhere from 10-30 times in one day. I felt like I was losing my mind.
Before I considered debt review, how I was handling my monthly expenses, was paying all of my credit cards (I had 7) minimum balances, then withdrawing whatever I could once the payments had cleared. I then used that money to pay off my clothing accounts (I had 6). Oh, there’s also the 4 personal loans that had automatic debit orders set up on my bank account, so I had to pay those every month. So I was basically robbing Peter to pay Paul. It got to a stage in 2009 that I really believed that debt review was my only way out of this mess.
I researched debt review, and clicked on the first company that came up. That was pretty much where my research ended. I paid the R50 to get assessed, and they determined that debt review was the best option for me. I wish I had done my homework better 😦 I believed that the harassing phone calls would stop; they didn’t. I believed that the legal action that was being threatened against me would stop; it didn’t. It took approximately 6-8 months after I went under debt review for all of my creditors to be informed, and for the ‘harassment’ to stop. Even then, legal action was still taken against me in 2011 for one of my credit cards, and I was handed over and would have had to appear in court if I couldn’t pay in full by the said date. Luckily my then fiancé (he’s now my husband) somehow came up with the money and I managed to settle that credit card and close the account.
I never actually realised how much work is involved with a debt review. I was under the impression that the debt review agency would keep tabs on my accounts and payments, and that once my accounts started being paid off, that they would get them closed and have the payments diverted to other creditors. That didn’t happen. Two of my creditors, one a clothing account and the other a credit card, I was actually in credit with them about 1.5 years into my review, as the accounts had been paid up, but never closed! I then had to contact them myself, get the accounts closed and have the relevant paperwork sent to the debt review agency so that they could then divert those payments elsewhere. I have repeatedly asked for the outstanding balances on all of my accounts; I am told that it is quicker for me to contact my creditors directly, as it can take 6-8 weeks for the debt agency to get any answers. 6-8 weeks? It blows my mind. It is also highly frustrating, as my accounts are sitting in the legal departments of most of my creditors, and it’s quite difficult to get information out of those departments. Also, once they have you on the phone, they then try and wangle anything out of you.
My daughter was then born in October 2009, and things just got financially worse from there. Children are expensive! Babies are REALLY expensive! Nappies and formula and crèche fees, expenses that I’d never had to deal with before, and now they were a norm. The lady that had been handling my debt review, also ‘forgot’ to put forward the debit order authorisation, and I only found out about this in early 2010, when my debt review was under threat of being cancelled. I was terrified; if it was cancelled I would have had to had found approximately R90,000 to pay everyone. I managed to get it sorted out, however if I miss 1 more payment during the rest of my debt review, it will be cancelled.
A set amount was then decided on, and they did not care that I was on maternity leave (unpaid maternity leave) and that I was claiming UIF, resulting in only receiving 1/3 of my salary every month. This was basically the debt review payment. I also had car insurance to pay, plus other expenses but they weren’t interested. Listen, I take full responsibility for my irresponsibility and carelessness with my money and credit, however a little leniency would have been appreciated. I had NEVER missed a single payment on ANYTHING since I started my credit journey in 2004. You’d have thought that they would have taken this into consideration.
I have however always put my debt review above everything else as I am so scared that they will cancel it and then I would be up poo creek without a paddle! It has severely limited me though; I cannot apply for vehicle finance, a cell phone contract, NO CREDIT. This is in place until my debt review is finished, and I can’t even tell you when that will be as I have no idea how much I owe everyone. I know that my debt has come down by approximately R30,000, and that 4 retails accounts have been paid off and closed, and 2 credits cards have been paid off and closed, but I really would love to know where I stand with my other 2 retail accounts, 5 credit cards and 4 personal loans.
I have always been open and honest about my financial situation with my husband, and when we had set a date to get married, I even arranged to see an attorney to get an antenuptial agreement / contract in place to prevent any of my financial hassles affecting him in the long run. Not long after that, the debt review agency contacted me to enquire if I had a vehicle, and if so I would need to sell it in order to clear some of my debt. I was actually dumbfounded. I very slowly and clearly told them that no, I did not personally own a vehicle, and even if I did, I would not be able to see it, as how on earth would I be able to get to work to earn a salary, to pay off my debt? They then asked me how I was currently getting to work, and I said that I was driving my husband’s vehicle as he had a company car. I could almost see the dollar signs in their eyes, through the telephone. I was then asked how I was married, and I very clearly explained that I had an ANC in place, and that they couldn’t touch anything of my husband’s. I then had to send them a copy of our contract, and I never heard anything about the vehicle ever again.
Yes, it is great in a sense having just one payment going off my bank account every month for my debt, but it is also frustrating as it has not been as easy as I believed it was going to be, as easy as it was explained to me that it was going to be. Every year the payment goes up, even though I haven’t had a salary increase in 4 years.
Looking back, I don’t think that I would have gone under debt review. I should have persevered, contacted my creditors and put payment plans in place, instead of running away and trying to hide like a child. I’m not saying that debt review wouldn’t work for everyone, I just don’t believe that it has done me the justice that I hoped it would.
The really scary thing, is that my debt was approximately R80,000 – R90,000 when I started my debt review. To date, in the 4 years that I have been under debt review, I have paid back approximately R90,000, but due to the interest that keeps building as my creditors refused to freeze it, I have approximately another R60,000 to go. Depressing right?
And the lesson in all of this? No, money does not grow on trees! If you can pay cash for something instead of putting it on credit, DO IT.