Is there really just one best solution to debt problems? The reality is, there are several ways to deal with debt effectively. In this article, we’ll be talking about the possible solutions one can take when confronted with debt as well as the steps that one can do to stay away from becoming buried under a mountain of debts.
Needless to say, the best way to address the problem is right from the beginning, before things get worse. For instance, if you find yourself presently struggling with your bills and you’re starting to miss or delay with your payments, don’t wait until your debt problem becomes more serious. Take action right away. How?
(I switched the next 2 paragraphs first they need to examine how to spend their money, then they can evaluate how to pay their debts on time)
First you need to look at your spending habits? How much do you spend each month? Calculate all your expenses for the entire month and compare it with your income. Are you spending more than what you can afford? You may not realize that you’re guilty of this crime unless you start writing down every single cent you spent for the whole month, add them up, and subtract it from your monthly salary. If you’ve been spending more than what your income permits, isn’t time to make some changes in your lifestyle?
Check your payment habits. How punctual are in submitting your payments to your creditors? How often do you use your credit card for your personal expenses? Do you make it a point to pay off your credit card balances in full each month? Or are you in the habit of carrying over your balances from month to month? Do you tend to exceed your credit card’s limit? Obviously, if you do, you do not only incur the high interest rate charge, you are also subjected to late penalty fees. Such a habit can easily put you in deep trouble.
Closely examining your spending and payment habit is the first step in setting yourself free from your debt problems. Remember that the only way you can be debt-free is to pay back what you owe to your creditors. If your income is not enough to cover all your expenses, you would need to make some sacrifices. Exercising self-discipline with how you use your credit cards or spend your cash is also crucial especially while you’re working on your repayment plan.
But what if you’re in far worse debt situation? What if you’re really stuck with huge debts to different creditors and there is no way your income can cover everything? What if creditors and debt collectors have been contacting you persistently just to make you pay? Should you declare bankruptcy right away?
Financial experts advice consumers not to be hasty in filing for bankruptcy. What other possible steps can you do? First, talk to your creditors and try to negotiate for an easier repayment plan. Explain to your creditors your present financial situation and request a lower interest rate, and a possible waiving of all the fees incurred. Many, creditors will to work with you if they can see your sincerity and willingness to take responsibility with your debts.
You can also seek help from a legitimate or government accredited credit counseling agency. A credit counseling agency can help you come up with an efficient repayment plan and they can also negotiate with creditors on your behalf. You can also ask advice on how you can better manage your finances and avoid debt problems in the future.