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Managing Debt: Common Myths and the Real Deal

Career

Debt is a topic shrouded in mystery and negativity. The fact is, most of us have some form of debt, whether it be a mortgage, student loans, credit card debt, or a car loan, so it is in our best interest to understand how debt works, and our rights when it comes to handling debt. Here are 5 common myths about debt and the truth about them.


Myth: Debt is only for “poor” people.

Truth: This could not be further from the truth. Debt is a “necessary evil” for most people, regardless of their income. You’ll be hard-pressed to find someone who doesn’t carry some form of debt in today’s society. Another common misconception about debt is that all debt is bad. However, debt only truly becomes “bad” when you can no longer afford to make payments or when affording basic necessities becomes difficult. And the truth is, “bad debt” happens to people at all socioeconomic levels. So whether you have good debt or bad debt, remember that it can happen to anyone and that there is no shame in it!

Myth: You can go to jail if you don’t pay your debts.

Truth: While this was once the case, the U.S. outlawed debtors’ prisons back in the 1800s. If you fail to pay back a debt, the debtor can be sued and then a civil judgment can be obtained by the creditor or the one that sued the debtor. The debtor, in this case, is summoned to a civil court. Depending on the Court and the jurisdiction (where you were sued) there may be rules that require the debtor to appear in Court. The failure to appear could force a warrant to be issued for your appearance. At that point, the police can jail the debtor until there’s a court hearing, or until they pay the bond. This is not based on the fact that the debtor owes the money, but the fact that the debtor did not comply with Court rules. This is still rare, but cases do pop up here and there. Still, bottom line is it is illegal to throw you into jail for owing a debt! Don’t trust a creditor if they threaten to throw you in jail and be careful about how you handle the legal proceedings once your debts have reached that stage. To be safe, consult an attorney to find out the exact rules and procedures surrounding your debt.

Myth: Telling a debt collector to stop calling you will make them go away.

Truth: This is only partially true. You can tell a debt collector to not call you again at work and they have to comply. You can also request that they stop contacting you altogether, but in accordance with the Fair Debt Collection Practices Act, you must make the request in writing in order for them to be obligated to comply. It is important to note that just because a debt collector stops contacting you, it does not mean the debt has gone away. You are still responsible for paying that debt!

Myth: Paying a debt in collection will remove it from your report and raise your score.

Truth: When you pay a debt that is in collection, the debt collector is supposed to update your report to reflect the fact that that debt has been paid. However, the debt collector is not obligated to remove it from your credit report. A debt that has fallen into collection will generally stay on your report for 7 years, unless specifically agreed upon by the collector to remove it once it has been paid in full. And unfortunately, paying a collection account without getting it removed will not improve your credit score. As long as it is listed on your credit report as having been in collection status, it will have a negative impact on your score. It is also important to note that you should always check your credit reports with all 3 bureaus (Experian, TransUnion, Equifax) to ensure that the collector did, in fact, update your report to show that it has been paid.

It is also important to note that you should always check your credit reports with all 3 bureaus (Experian, TransUnion, Equinox).

Myth: Bankruptcy is the only way out of debt.

Truth: While bankruptcy is necessary in some cases, it should really only be looked at as a last resort. Often, there are other, much simpler ways of climbing out from underneath mountains of debt. It may be as simple as consulting with a financial advisor to rework your budget and come up with a debt repayment strategy, or you may decide to go one step further and consult with an attorney that specializes in debt resolution. Either way, be sure to research all your options before resorting to bankruptcy.

7min read
Culture

The Middle East And North Africa Are Brimming With Untapped Female Potential

Women of the Middle East have made significant strides in the past decade in a number of sectors, but huge gaps remain within the labor market, especially in leadership roles.


A huge number of institutions have researched and quantified trends of and obstacles to the full utilization of females in the marketplace. Gabriela Ramos, is the Chief-of-Staff to The Organization for Economic Co-operation and Development (OECD), an alliance of thirty-six governments seeking to improve economic growth and world trade. The OECD reports that increasing participation in the women's labor force could easily result in a $12 trillion jump in the global GDP by the year 2025.

To realize the possibilities, attention needs to be directed toward the most significantly underutilized resource: the women of MENA—the Middle East and North African countries. Educating the men of MENA on the importance of women working and holding leadership roles will improve the economies of those nations and lead to both national and global rewards, such as dissolving cultural stereotypes.

The OECD reports that increasing participation in the women's labor force could easily result in a $12 trillion jump in the global GDP by the year 2025.

In order to put this issue in perspective, the MENA region has the second highest unemployment rate in the world. According to the World Bank, more women than men go to universities, but for many in this region the journey ends with a degree. After graduating, women tend to stay at home due to social and cultural pressures. In 2017, the OECD estimated that unemployment among women is costing some $575 billion annually.

Forbes and Arabian Business have each published lists of the 100 most powerful Arab businesswomen, yet most female entrepreneurs in the Middle East run family businesses. When it comes to managerial positions, the MENA region ranks last with only 13 percent women among the total number of CEOs according to the Swiss-based International Labor Organization (ILO.org publication "Women Business Management – Gaining Momentum in the Middle East and Africa.")

The lopsided tendency that keeps women in family business—remaining tethered to the home even if they are prepared and capable of moving "into the world"—is noted in a report prepared by OECD. The survey provides factual support for the intuitive concern of cultural and political imbalance impeding the progression of women into the workplace who are otherwise fully capable. The nations of Algeria, Tunisia, Morocco, Libya, Jordan and Egypt all prohibit gender discrimination and legislate equal pay for men and women, but the progressive-sounding checklist of their rights fails to impact on "hiring, wages or women's labor force participation." In fact, the report continues, "Women in the six countries receive inferior wages for equal work… and in the private sector women rarely hold management positions or sit on the boards of companies."

This is more than a feminist mantra; MENA's males must learn that they, too, will benefit from accelerating the entry of women into the workforce on all levels. Some projections of value lost because women are unable to work; or conversely the amount of potential revenue are significant.

Elissa Freiha, founder of Womena, the leading empowerment platform in the Middle East, emphasizes the financial benefit of having women in high positions when communicating with men's groups. From a business perspective it has been proven through the market Index provider MSCI.com that companies with more women on their boards deliver 36% better equity than those lacking board diversity.

She challenges companies with the knowledge that, "From a business level, you can have a potential of 63% by incorporating the female perspective on the executive team and the boards of companies."

Freiha agrees that educating MENA's men will turn the tide. "It is difficult to argue culturally that a woman can disconnect herself from the household and community." Her own father, a United Arab Emirates native of Lebanese descent, preferred she get a job in the government, but after one month she quit and went on to create Womena. The fact that this win-lose situation was supported by an open-minded father, further propelled Freiha to start her own business.

"From a business level, you can have a potential of 63% by incorporating the female perspective on the executive team and the boards of companies." - Elissa Frei

While not all men share the open-mindedness of Freiha's dad, a striking number of MENA's women have convincingly demonstrated that the talent pool is skilled, capable and all-around impressive. One such woman is the prominent Sheikha Lubna bint Khalid bin Sultan Al-Qasimi, who is currently serving as a cabinet minister in the United Arab Emirates and previously headed a successful IT strategy company.

Al-Qasimi exemplifies the potential for MENA women in leadership, but how can one example become a cultural norm? Marcello Bonatto, who runs Re: Coded, a program that teaches young people in Turkey, Iraq and Yemen to become technology leaders, believes that multigenerational education is the key. He believes in the importance of educating the parent along with their offspring, "particularly when it comes to women." Bonatto notes the number of conflict-affected youth who have succeeded through his program—a boot camp training in technology.

The United Nations Women alongside Promundo—a Brazil-based NGO that promotes gender-equality and non-violence—sponsored a study titled, "International Men and Gender Equality Survey of the Middle East and North Africa in 2017."

This study surveyed ten thousand men and women between the ages of 18 and 59 across both rural and urban areas in Egypt, Lebanon, Morocco and the Palestinian Authority. It reports that, "Men expected to control their wives' personal freedoms from what they wear to when the couple has sex." Additionally, a mere one-tenth to one-third of men reported having recently carried out a more conventionally "female task" in their home.

Although the MENA region is steeped in historical tribal culture, the current conflict of gender roles is at a crucial turning point. Masculine power structures still play a huge role in these countries, and despite this obstacle, women are on the rise. But without the support of their nations' men this will continue to be an uphill battle. And if change won't come from the culture, maybe it can come from money. By educating MENA's men about these issues, the estimated $27 trillion that women could bring to their economies might not be a dream. Women have been empowering themselves for years, but it's time for MENA's men to empower its women.