Ensure you’re insured

We had a very distressing case this week. Unfortunately it wasn’t anything we could help with but the lessons to be learned from it are important.

The lady who contacted us lost her husband a while ago. He was the sole wage-earner in a household comprising him, his wife and six children and was buying a house from BHC. Unfortunately after his death his wife and kids were left with very little income. She stopped paying the mortgage and fell very quickly into serious arrears.

Four years after his death and after running up a total debt of over P70,000 BHC finally had no choice but to evict her.

Before I go any further let me stress that this isn’t a criticism of BHC. They are not at fault here. She simply hadn’t been keeping up with the repayments. In fact they seem to have been remarkably tolerant, giving her every opportunity to pay over an extended period. But BHC isn’t a charity, it’s not there to provide free housing. There are advertisements all over the country warning us about what happens if you can’t make your repayments. There are also adverts saying that you if you have a problem you should go and explain it to them and they will do their best to sort it out. BHC are not the bad guys in this story. In fact nobody is. Well there may be one but I’ll come to that later.

Anyway, they evict her and now she is homeless with 4 children still at school. All in all it’s a horrible story, very tragic and saddening.

We have done our best to help though. We contacted BHC but they are understandably saying that with that sort of debt outstanding there is not much they can do.

However we have now heard again from the lady in question and the news is actually even worse. It seems that a loan shark has offered to lend her the money so that she can pay off the accumulated debt, own the house completely and then rent it out to pay off the debt to the lender. We haven’t heard the exact details yet but this is very worrying. How exactly is the mathematics going to work? Knowing how loan sharks work, the sort of interest the charge and their reactions when there is a problem with payment we are worried. There is no way we can calculate a repayment schedule that will work out. At best she will need to rent out the low cost former BHC house for somewhere between P7,000 and P10,000 to stand any chance of ever paying off the loan and that is simply never going to happen.

Instead, what we confidently predict will happen is that in the very first month she won’t be able to make the first repayment, the unscrupulous lender will demand the keys to the house and she will be in even bigger trouble than before. And she still won’t have a house to live in. And she’ll then owe even more money and now to someone much less proper than BHC. BHC charge reasonable interest on late repayments, loan sharks demand absolutely exorbitant levels.

So can any lessons be leant from this awful situation? Well, seeing as most of this is beyond the lady’s control there may not be many but there is one that stands out. One thing that we all should consider whenever we enter into any sort of serious debt, whether a house purchase, a bank loan or a credit card.

Insurance.

When we discussed this situation with BHC they mentioned that they now do their very best to make purchasers take out insurance to cover them in the event of misfortune. This is very wise advice. Although it might sound silly to spend money insuring against something that will probably never happen, we live in an environment where these things DO happen, all the time. Many of our neighbours and cousins are dying, whether from illness or car accidents leaving their families destitute. For a very small payment ever month they could have at least ensured that their bereaved families still had a roof over their heads.

The situation then got me thinking about the occasional kindness we see from companies. Firstly, and perhaps ironically, from BHC. They didn’t throw her out after her bereavement. Instead they gave her a long time to set things straight. It’s not their fault that she couldn’t.

Then, of all people, Wimpy. They heard about the basics of the situation and immediately offered the family a Wimpy family meal voucher so at least the kids can have a decent meal some time soon.

Incidentally if anyone else want to donate anything to her and the kids all they have to do is contact us and we will make sure they get it.

This week’s stars!

• Alan at Wimpy for his generosity and kindness.
• DHL for recovering from a problem with style.
• Cedrick from BPC for service above and beyond the call of duty.