Part III
There must be a good reason why a person wants to get out of debt. Like we said, debt is a tool which in the hands of a good manager will produce good result. Why return the tool if it is doing what it is supposed to do, create additional value. To a good manager, his creditor is a friend who gives him the right tools to create value. To a creditor, the borrower is a friend who is a good manager who can add value to other people’s money, thereby paying the creditor interest.
When we talk of getting out of debt, we are talking about debt that has gone sour or about to. There are so many reasons for this and as we have discussed previously, management is a primary issue. The more that debt stays with the person, the more it eats up the income that the person should be enjoying. When the loan gets unpaid on due date, interest cost pile up, which becomes a problem that keeps on compounding itself. When this is happening, our human tendency is to think that this is a money problem and look at more money as the solution. Actually, money can be a temporary solution and one should not stop there. The person must retrace past moves and be honest to admit why and how the problem started.
Something happens when we start admitting our mistakes. God wants to be involved in our problems, but being a father, He wants us to learn from every mistake that we make. The journey towards a solution may be long and hard, but when we come out of trouble, we are changed persons. If we have God, our character will change, values will change, priorities will change. I believe that in our humility, God is able to work. He brings down the proud and exalts those who are humble and give them the grace to overcome. I have seen families get closer first to God and to each other, after a long drought that have aligned their values and character. They become so thankful for the lessons they have learned which they may not have learned if those trials did not come. God is so good, He does not want us to miss what is most valuable.
In journeying towards a solution, remember that there are always 2 parties to a debt transaction, lender and borrower. Imagine that at the beginning of the transaction, you had a chicken. The creditor agreed to provide the feeds until such time the chicken lays its eggs. Some eggs go to the creditor. Most of it go to you. When the chicken stops laying eggs, both of you should be happy. After months, something happens and it seems like the creditor is displeased with the way you are fulfilling your promises, not giving him his portion of eggs. As a result, he comes to you everyday, demanding that you give him the chicken because he no longer trusts you.
If you give him the chicken, you lose your means of livelihood. You have to convince him that your failure to give him his share of the eggs was just a glitch, something that can be cured. This means the borrower having an honest look at his situation and evaluating his options. Usually, it is like being in a boat which suddenly developed a hole and water is fast sipping in. You can delay sinking and drowning until you get to land only if you plug the hole if that is possible, or throw off some of your load to lighten the ship. This may mean, deciding to forego most of your luxuries, selling some of your assets, trimming your costs, and finding ways to be more efficient and increasing your income. This may mean asking for your creditor to lengthen the terms, lower the interest rate, so that you can still pay. You have to show, as in the example of the chicken, that the chicken will stay alive and continue to lay eggs if it stays with you. Most creditors want to stay as creditors. They want raising of chickens to stay with you. If you can convince him that you can still be trusted to take care of the fowl, he sticks it out with you. But understand that he will pay you more visits to make sure you are doing your duties. He will complain if he sees you on Facebook travelling, driving an Audi, enjoying the newest restaurants, or boasting about your new Armani suit, when he buys his stuff only from Uniqlo.
In extreme scenarios, you might want to look at the possibility of asking your creditor to settle for less eggs. When the creditor sees that will be the best option for him, regaining back his capital rather than losing it, he might agree, thus allowing you both to move forward.
As I have said before, interest rates of 3%per month and above is usually heavy. In this case debt should be avoided. The first thing to consider when borrowing is how good a manager you are, that you can manage other people’s money.
Let us remember that in all wealth creation activity, and even in our troubles, the Lord wants to get involved.
“But remember the Lord your God, for it is He who gives you the ability to create wealth, and so confirms His covenant as He swore to your forefathers as it is today.”
-Deuteronomy 8:18
I pray that you will grow in wisdom as you manage your resources, and that you will continually prosper as the Lord blesses you and that you will be a channel of His blessings.
Boni de Jesus 