Getting rid of the credit crutch

 

Saying goodbye to the crutch that is credit is easier said than done.

I got in touch with debt counsellor that handled my brother’s case, swallowed my pride, and sent through stark and embarrassingly honest accounts of how much I owed, how little I earned, and how completely messed up the whole situation was.

Once the process was started, things happened pretty fast. Tables were drawn up with expenses versus income, and a preliminary schedule was sent through my creditors. This schedule had reduced instalments and interest rates proposed for the creditors to review. Then it was taken to court and signed off.

A debit order was created and every month a distribution agency would deduct money from my account to pay the creditors, cover their own expenses, and the percentage due to the credit counsellors. The first three payments were allocated to my counsellors only to cover the legal fees to have my case reviewed and finalised.

It was such a relief to not worry about the bank calling me to harass me for payments. And for the first time in a very long time my budget actually balanced, even if only just. I tried to save bits of money for unforeseen circumstances, but pretty much every cent was accounted for on paper. I’d had to be bailed out by a friend when my medical aid savings ran out and I needed to get through the self-payment gap, but for most part things were okay.

I paid up my two remaining store cards quickly, and had those funds allocated to the next smallest amount.

And then I was retrenched. Again. At least I got a decent package and would be okay for the next few months. In hindsight I should’ve asked my counsellor to request assistance from my creditors, but again, that perverse pride in paying what I owed…

I did an unpaid internship for three months, and was appointed fulltime after that, but my CTC was almost R8 000 less than what I had earned before being retrenched. Suddenly I couldn’t afford being under debt counselling either.

Several sleepless nights and emotional discussions with my counsellor, family, and friends later, I applied for sequestration. I had to borrow money from my friend again to pay for the legal fees – this time it needed to be paid up-front. That was in July. By now I’ve already made my first three instalments on the newly calculated debt: 20 cents to the rand of what I owed, interest-free.

If everything goes according to plan I’ll be paying my last instalment at the end of February 2015, and will have two-and-a-half years of rehabilitation left before being allowed to apply for credit again.

I’m confident that everything I’ve learned over the last three years has changed my relationship with money and how I will deal with credit in the future. And yes, I realise that there will most likely be credit in my life again – I have a dream of owning my own home one day, and know that it won’t happen without credit (or the lottery – by the way only buy Lotto tickets if you have eBucks and nothing else to spend it on, and don’t put your hopes on it).

And my car – the one I bought a month before being retrenched the first time – will be ten years old next April. She hasn’t let me down yet, and doubt she will anytime soon, but she’s a machine and they’re just as unpredictable and fallible as humans.

I still battle with my bad habits, but know that they serve a purpose and I don’t have to be a slave to them. Not anymore. Not ever again.

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