Keep calm and manage your debt

Oct 22, 2013 by

If you are in debt then there might be quite a few things worrying you right now. Are you having trouble paying the monthly payments? Have you defaulted on your payments so that your creditors have turned your accounts over to the collection agencies? Are you being constantly harassed by creditors and collectors over the phone? If your answers to most of these questions are yes, then it is time for you to sit down and make practical decisions as to how you will manage all your debt before it gets to you. Ideally, there are one of two options. One of them is creating a budget for yourself and managing the debt on your own. On the other hand, if you think that the situation has become too messy, and then it’s time for you to avail some form of debt relief services involving debt settlement among other options.

Debt relief

What are the options?

There are quite a few options that will enable you to be able to manage your debt in a systematic fashion. The do-it-yourself options include budgeting realistically for you, among other things. If you want to go in for debt management then you could try credit counselling, debt management, debt consolidation and so on. One of the last resort options could also be bankruptcy. However, to know which option is the right one for you, you need proper financial advice and counselling. This will depend on a lot of things including your income, savings, assets, financial future, etc.

Do it yourself

If you are still wary about going in for big financial decisions like debt settlement, then try managing your debt on your own at first. The first thing to do is to make an assessment of how much you earn and how much you spend. First, do an income assessment from all possible sources. Then take into account the amount of money that you spend each month. Factor in expenses like monthly payments on debts, food, utilities and necessities. Make a list of your fixed and fluctuating expenses. Once you have done this, find ways of cutting down your expenses, and making ways to save more money for your debt, or in general.

If you realise that you are still in trouble and need help, then you can contact your creditors and tell them that you are having trouble keeping up with the payments. Don’t wait for too long to do that because if you have default accounts then your accounts will have been turned over to collection agencies. Once they have been turned over, you will be at the mercy of the collection agencies and their various methods of harassment.

Going in for professional help

If you deem the situation to be out of control, then it’s time to contact a company specialising in debt relief services. For example, if you feel that you can’t pay off your significant amount of credit card debt then you can go in for debt settlement. Through this procedure, the company will negotiate with the creditors on your behalf to have a significant portion of your debt written off. The rest of the amount is paid off with small monthly payments over a period of 2-3 years.

Other than debt settlement, credit counselling is another option. There are many organisations and some non profit ones too that can help you on how to manage your finances and debts. They can help you make a budget, cut costs and so on. Always try and go in for face to face counselling if you can.

About the author

Dave is a credit counselling specialist working with a company offering debt relief services. Over the last ten years, he has helped borrowers create personalised budget plans to manage their debts. As a hobby, Dave likes dirt biking.

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