One of the many jobs your dad did was a Debt Collector, not the ‘Ah Long’ type, but the legal type, I started off this line of work with Standard Chartered Bank, that was here I met your mum. (That’s a story for another time) Back then such line of work was called ‘Customer Assistance’ and other times it is called ‘Credit Management’. Colloquially, we are known as Credit Control, Debt Collections, Collections or even ‘Accounts Receivables’.
I spent almost 10 years there, from 1999-2009, and looking back, it was these years that I reflect back and learned a lot of lessons, in handling people, more about myself as a person, and also the unintended long tail of consequences. The more salient points first.
People called it ‘financial literacy’, passive income and all that fancy name, for me it is plain simple, your output must not be more than your input, you cannot spend more than you earn. Of course if you are in business and investing, this sounds like an act of financial cowardice, but hey, this simple principle has ensured that no one is suing your dad for debts, or your dad is so swamped with bills he has not more money to spend on the family.
True story, I was working with a bank and through our system, I picked up an account, and looked at the profile: Young guy, just joined the military, his credit limit- $6,000, which he has maxed out couple of months back and he is now overdue in paying his credit cards. It’s a brand new account by the way. He also have a ‘Line of Credit’ account, which is similar to a credit card except you don’t have a credit card, maxed out at $6,000 as well.
That makes his total debt with my bank $12,000.
Back then we can call our counterparts in other banks to do something of a ‘card check’, this quid pro quo industry practice back then helps us manage our debtors, exchange information to help us get a more holistic picture about how deep our debtor’s debt is, actually. This guy?
Other than my bank, he also owed, like maybe 4 to five other banks.
Which means his total debt known is about… $60,000?
For a young guy who just stepped into the working world as a SAF regular.
Let’s work the sums back, usually banks will grant you a credit limit of 2x your income. If he had the $6,000, it mean that his income is about $3,000. How much we say he owed all the banks?
Good. Luck. To. Him.
Garnishee order (of sorts)
You boys might not heard of such a thing, but the bank is legally allowed to take the money you have in your savings/ current account to pay off your debts. This happened to one guy who was so unlucky to have this happened to him on his payday.
He owed the bank credit card debts which he didn’t pay and the account was cancelled. Once that happens, the bank will want the full payment from you. For his case, his savings/ current account was with the same bank, where he puts his salary in. Since there was money in there, we took everything and use it to pay off his credit cards, which was still not enough to clear everything.
We wipe out everything in his savings account, and it was still not enough to clear his credit card debts.
He called in that morning, because he tried to use his savings ATM card to pay for his daughter’s medical bill, and it was decline. Of course.
There was nothing we can do as it is standard procedures, like so many debtors I’ve come across, he had tonnes of excuse, but it was sheer bad luck that we cancelled his account and took all his money at the moment he got the salary. Now he has to find other ways to tide over the month till his next pay check.
For Garnishee Order, it is actually quite technical, first the bank or creditor has to find out your payday, and execute this order, on or near your payday, of which the court can seize your salary and use it to pay the banks. and the next pay check, the banks have to do it all over again.
Next time, I’ll tell you boys some more stories about things that has happened in the banks.