The problem of personal debt can seem intractable. But there are ways out of it

Improved financial literacy, realistic lifestyle choices and dealing with rather than hiding from banks can all help

The National has offered meaningful help to readers via its personal finance advice and The Debt Panel. Mona Al Marzooqi / The National

"Annual income twenty pounds, annual expenditure nineteen and six, result happiness," declares Wilkins Micawber in Dickens's David Copperfield, cautioning: "Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery". This newspaper has not only echoed Mr Micawber's sage warning, it has also led the conversation on the country's relationship with money, and offered meaningful help to readers via its personal finance advice and the Debt Panel.

Debt, however, is not always the product of profligacy. Often, people accrue financial liabilities which they cannot realistically meet in order to address genuine and unexpected needs. The reasons for overspending or borrowing may vary, but the repercussions for those struggling with repayments can be devastating. Living with debt, for those unable to clear it, can be riddled with anxiety, shame and a profound sense of helplessness. There is, alas, no magic formula for consumers to work their way out of trouble. Many debtors live in perpetual fear of banks and lending institutions, and many pile up additional debts to repay their original loans –  all the while sailing further and further away from safety. But amid the gloom, there are inspiring stories of individuals who have found a way out of seemingly intractable problems of indebtedness.

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As The National reports this week, a Sharjah resident who racked up a Dh140,000 personal debt on half a dozen credit cards in the course of a year was able – after repeated attempts to evade his lenders out of fear and denial failed – to negotiate a restructured re-payment plan with them. Thanks to his decision to confront the problem, his outstanding debt is now under Dh100,000 and he regards himself as living "proof that negotiation works". He regrets not having approached the banks sooner, thereby accumulating additional interest on his original debts, and advises others to avoid debt management companies – which charge fees to do what consumers can do themselves – and deal directly with lenders.

The experience of this particular consumer suggests that improved financial literacy and a willingness not to shy away from tough conversations can in the end be of immense benefit to those struggling with debts. Realistic lifestyle choices should be a priority for all consumers, but banks too must realise that they are far more likely to recoup their money by cooperating with and helping their customers than by intimidating and squeezing them.

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