Denial – the enemy of a new start
Financial counsellors can’t work miracles by themselves, says Wesley Creditline counsellor Sumayya Chota.
The hardest thing is if clients don’t want to accept responsibility for their debts.
You list a couple of options for them and they just refuse: “We can’t do this. We’re not going to take our kids out of private school. I have to give my three-year-old kid a birthday present of $600 because I've been deprived as a child so I want to give my kids the best.”
They don’t want to look for further employment.
They refuse to save. We have lists of resources and information and education that I could hand over to the clients which have shopping tips, how to save. There’s over a hundred ideas of how to save on different little aspects in living expenses but – “No, we’re not going to do that.
“No, I have to leave the lights on at night because the kids are scared to walk in the dark.
“No, I have to take my kids to McDonalds every week".
How about paying a little extra to your personal loan or your credit cards or any other creditor that you have? Put an extra $10 or $20 in there. “No, but I have to go out to dinner with my mates once a month. I have to contribute to this social event every week – I have to contribute $100.”
A common thing is, “I have to have Foxtel for my kids because I don’t allow my kids to go out”. So, while working out their budget, their money plan, you ask whether they hire DVDs – “Yes”. Do they go to the cinema? “Yes, I like to take my kids out”. But they’ve just got the whole Foxtel deal because they said they don’t want their kids to go out but they also take your kids to the cinema. “Yeah, well, my friends like to go out with their children”.
They don’t give the kids snacks and a drink bottle to take with them: so after giving them $15 for the movies they give another $15 to buy something at the cinema, then some more money to buy ice-cream or something at McDonalds afterwards. They won’t budge from this. They’re in denial: “We will just live as we have lived and be quite happy. And if we can’t pay our debts, that’s no problem, we’ll just go bankrupt. Yep, we've got nothing to lose. We’ll just go bankrupt.”
I explain all the advantages of bankruptcy and the much greater disadvantages. But most of them, because of the depression and the frustration and the anger and the stress of all these huge debts they’ve incurred, they just want to get rid of the debt and they’re not bothered about the consequences. Their friends have said, “Go bankrupt: you will get rid of the debt and you can have a fresh start”.
I tell them that their name will be listed on Veda Advantage for seven years. So even after they’ve been discharged from their debts and want to apply for credit again, credit providers will check on Veda Advantage and find that their credit rating is zero. They’ll also be listed on the national personal information index for life as one-time bankrupts."
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DISCLAIMER: The information provided in this information sheet is of a general nature only, and is not intended to be legal advice. There may be errors or inaccuracies or the information may not be completely up-to-date. Always check the information provided before relying on it. The information relates to consumer law in New South Wales, Australia
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