Personal debt the day after the war

Have you heard and seen the astounding number of radio and TV commercials at prime time, advertising loans?

The loans are disguised as “help” for soldiers and families in trouble, when in truth they are generating big business for the banks and endangering the personal financial stability of the weak and vulnerable sectors.

Now that the war is carrying on for an extended period, more and more people are both financially challenged and emotionally exhausted.

Banks and financial institutions are seizing this opportunity to tempt them into taking out loans with a simple click on the phone – what could be easier than having a nice sum of money land straight into your Paybox?

Unfortunately, this simple click often leads down the road to insolvency, bankruptcy, hoza’a lapoal…

Before the war, 10% of Israeli citizens were in personal bankruptcy. The number is sure to skyrocket as the war goes on.

Taking out a loan today means being in debt tomorrow.

When there isn’t enough cash flow for the family to live day to day, paying off the debt becomes a nightmare.

Unbearable stress, physical and mental suffering, marital and family breakdown are soon to follow. The burden can last for years and years until everything is settled and paid off.

The banks and financial institutions have huge PR budgets for media advertising; the poor miluimnik or evacuee has no tools to withstand this temptation.

מציל עני מחזק ממנו (תהלים לה:י)

“[Hashem] saves the poor person from the one stronger than him…” (Psalms 35:10)

What can be done?

In my experience as a debt counsellor, I discovered that every person in debt could have avoided taking out a loan to solve their cash flow problem.

They unfortunately lacked the tools to understand their complete financial situation.

Money in the bank (or lack of it) is only one component of our financial situation. There are also government benefits and allowances, savings plans, pension and keren hishtalmut funds, tax refunds, properties and investments.

A financial counsellor assesses the entire financial picture of the family and suggests ways to increase income, decrease expenses, access benefits and rebates, withdraw and consolidate various funds, and restore cash flow and financial stability.

These steps must be done before contemplating entering the risks of taking out loans.

If you have a fever, would you go into the medicine cabinet and grab the first pills you see on the shelf?

If you’re in financial crisis, do not grab the easy route of an instant loan.

Get help and here’s how:

Click here for Kol Zchut’s comprehensive list of organizations providing counselling and assistance for people in financial difficulty.

Click here for a digest of professional personal financial counsellors located throughout Israel.

Investing time in managing your finances today will save a great deal of anguish later on.

We must all pull together for a safe and healthy recovery from our crisis.

We need to emerge strong and secure, both militarily and financially.

This blog post was originally published in The Times of Israel
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