When you feel that your back is up against the wall, then you may feel that managing debts can really be tough if not impossible. However, ‘impossible’ is the word that is found in the fool’s dictionary and you do not have one for sure. It is just your ignorance about debt, money management and other matters that make it so seemingly impossible to you. You should never give up hope as there are one too many options available out there for people like you who are having trouble managing their debts.
The best way is to consult with your lender and make out an affordable repayment plan. You may visit to know about the different options and possibilities for negotiation and fix an appointment. In most cases, reliable and understanding creditors will offer you another chance to mend your damaged credit due to a couple of skipped payments.
The creditor may offer you an extended repayment period and may even agree to waive a part of your outstanding balance or specific charges. You may be allowed to make smaller payments over a longer period of time. All you have to do is informing the creditor about your financial status and the maximum you can do and pay to but make sure you agree only to a plan that you can afford and be able to stick to.
If you are realistic and honest about your situation and financial affordability you and your creditor can work out a plan that will take care of your other debts but will not affect your living costs. Chances are high that the creditor may even agree to settle the entire debt provided you can make a lump sum payment. Once again never go over and beyond your affordability so that you can keep to the new repayment agreement.
However, if you still cannot pay up what you have agreed to with the creditor it is best to take free legal advice or help of a proficient credit counsellor. At all cost you must stay away from a company offering your credit repair service at a low cost. Most of the times these are a scam and for the rest of the times these are ineffective.
Follow the golden rule
Ideally, there are five golden rules for managing debts.
- It all starts with tallying up your debts
- Getting urgent help when you need it
- Setting up a proper budget
- Prioritising your debts and
- Considering refinancing or debt consolidation options.
This will help you to make a meticulous plan to manage your debt and in case you still find it difficult then you can go for other alternative arrangements of loan repayment. In either way, you will be able to manage and retain the good health of your credit score which will take a severe hit if you do not repay or declare bankruptcy.
Tally up the debts
When you consider all your debts to tally them up, follow a specific process for faster and effective results.
- Make a list of all of your debts along with the amount outstanding, the rate of interest, the date of payments and the amount you have paid up.
- This will tell you where exactly you are standing on your debt field.
- You will have a clear picture of each debt before you set on with the other steps of debt management and how much funds you really need to arrange.
- It will also help you to review your debts and your overall financial situation.
Get help when needed
It is natural that you will get stuck right at the outset of your debt management planning process. However, in such situations, there is no shame in asking for help from experts who are ready to help you for free. Availing help urgently will enable you to act quickly and properly and make both ends meet effectively. Places where you can go to find help include:
- Financial counselling for free that is offered by different community organisations and legal centres. Few government agencies may also help you to solve your financial issues.
- Free legal advice is also available if you are facing legal problems along with issues in debt management. There are several Legal Aid agencies in every state offering such a service.
- Urgent money may also be arranged from different financial services during such a crisis.
Lastly, you can ask for tips visiting https://www.libertylending.com/ or that of your specific creditor. Most of these reliable creditors will understand your problem and come up with effective and useful suggestions.
Design a proper budget
No finance management is possible or successful without a strategic budget in place. Make sure that your budget is realistic and you stick to it diligently. Your budget is the only way to stay on top of your finances. This will also ensure that your money is not wasted and it goes exactly where it is supposed to go.
It is just an effective act of controlling your finance and certainly not a deprivation of your wants. You will get several budget planners for free if you search online to help you in this matter. Once it is set, you will know how much money is saved and you have on hand so that you can afford to pay off your debts through extra repayments. You can even increase your savings by cutting your expenses short for the time being.
Prioritise your debts
This is the most important part of your debt management plan. When you arrange your debts and prioritise them, you will know which is affecting your financial condition the most. If you find that there are a few small amounts outstanding make sure you pay them off fully. Find out which debts you can pay off first depending on the available options. You may start by paying off the debt with the highest interest rate or the smallest debt first to get that sense of achievement. For the others continue paying the minimum amount to avoid late payment charges.