There are no debt problems that cannot be resolved! We may not be able to come up with quick solutions or immediate fix, but there should always be a way to solve it. And the earlier you deal with it, better debt management.
Debt is not just a monetary issue, it involves the wholeness of your life. So, solutions are wide and varied – from cutting on spending, finding lower interest rates, budgeting, or simply getting out of your debt with a help solution from experts.
There are ways to deal with debt problems. Which one is right for you will depend on whether you’re in a technically defined debt, or if you are just worrying or due to huge debt.
There’s a strong indication if you answer yes to either of these:
Are you having difficulty paying all your basic outgoings: mortgage, rent, energy bills or credit card minimums?
Are your debts (excluding your mortgage) bigger than a year’s after-tax income?
Before you start tackling your financial problems, the basic and most important thing to do is get a disciplined handle on your spending. Stop borrowing and maximize repayments. Focus on cutting the cost of debts, rather than looking at the bigger picture of all spending.
Refrain from borrowing more. Traditional debt help say: Never borrow your way out of a debt problem.
If it’s possible to borrow more cheaply elsewhere to replace existing borrowing, this can provide a huge boost as lower interest rates mean more of your cash goes towards paying the actual debt rather than just covering the interest.
If you can’t cut cost on debt, or if after doing that you’re still struggling, then consider some severe measures.
- Talk to your lender, let them know if you are unable to pay; it’s always better to talk to them.
- Get help from the government – There are few ways which may be able to provide you with interest-free borrowing than getting into commercial loan. You could get as much as $1000 lent, and repayments are dependent on what you can afford to pay.
- Free Debt Counseling – If all options are exhausted, it is worth talking to the right people to counsel you, the non-profit debt counselling help. Be careful not to confuse this with ‘free help’: many commercial companies say they’re free as you’re not charged directly, but you’ll still pay somehow.
These non-profit agencies are also the ideal people to go to if you’re being harassed and bullied for payments by debt collection agencies. The debt counselling service will inform collectors, which will then give you a month’s breathing space to get yourself on a better footing. And take care of your debt at a manageable pace.