I believe that debt can best be avoided by proper budgeting and living within one’s means to start off with. That means including in that budgeting a savings plan so you are building up a cushion in order to allow you to better survive the lean times. It’s just like the story in the Bible where seven years of plenty were followed by seven years of famine. The reason that the Egyptians were able to survive the seven years of famine was because they had saved warehouses of grain during the seven years of plenty, whereas everyone else blew all their resources and starved when the going got tough. This is the age-old cycle of economic boom and bust, of prosperity followed by downturn. And people need to anticipate it. It is difficult because we go through periods of reasonable prosperity and we don’t remember the bad side too much. So my advice really boils down to proper budgeting, living within your means and saving. And the younger we can educate people in that, the better.
How to avoid the debt problem
November 9th, 2009Debt Counsellor Interview
November 7th, 2009I remember we had one client, a woman, who had an obvious drink issue. I am not sure if the debt caused the drink or the drink caused the debt, but there was definitely a problem there. She came into the office with bandaged arms, and I sensed that something was wrong. We got her to speak to her family about it, and they managed to get her professional help. I am often in the position where I can see that there are other emotional issues involved, but I can’t help with it directly. So the message for the client, I suppose, is to take a degree of responsibility for resolving emotional issues yourself, either with the help of friends and family or a professional counselor.
What is a Creditors’ Meeting?
November 6th, 2009In the past, when the legislation was first put together 19 years ago, there would actually be a physical creditors’ meeting. The creditors would sit at a table looking at the client, and the Insolvency Practitioner would sit there reading out the proposal. Nowadays, however, people do not go to the inconvenience of calling a physical creditors’ meeting – only the name remains. Large creditors instruct Grant Thornton or someone else to vote on their behalf, as it were by proxy. In their representative capacity, they take instructions from creditors to vote in a particular way, according to a particular set of guidelines. So the client does not need to turn up. You could call it a paper meeting. As soon as the meeting happens, one of the IP’s team or staff monitors the proxies as they come in, and as soon as they have enough creditors who have accepted the IVA to make it a success, they contact the client and tell them the good news.