What will you do when your debt spirals out of control? Perhaps you no longer know where to turn next. A lot of us spend far beyond our means and cannot save adequately for future’s needs/emergencies. And more often than not, it spells disaster! What if you suddenly lost your job, or any other source of income? And you are in a mortgage, had a medical problem? What would you do now? Before you get trapped in this situation, or worse, bankruptcy. Observe these warning signals and steps so that you can take the right decision:
KNOW HOW MUCH YOU OWE. - Some people doesn’t even have any idea how much they actually owe compared to how much they earn. Spending may seem be a satisfying and great outlet to relax, but NEVER forget to think about first on how these purchases are going to be paid. Are there any available funds to take care of them? Think about late payment fees and other surcharges that may be incurred. This can lead late payment fees and incur elevated interest rates.
DON’T HIDE FROM PROBLEMS. - Once you realize that you’re having difficulty paying bills, proactively talk to your creditors. Never wait for them to contact and demand your payments, and don’t even consider ignoring them. It’s far better to work it out with them first than to let your options go zero.
GET HELP. - If you feel that you are pined to the wall, always remember that there are other resources available. Some professional financial advisers/companies can help you iron out your financial burden. They teach you financial management skills, and in some cases, they help you out in negotiating your repayment plans with creditors, even securing lower interest rates or waive some fees. BUT one word of caution: don’t get preyed with unscrupulous firm that can use your vulnerability to get pass at you. You can also get help from other agencies that are into handling financially trapped clients.
They charge reasonable fees that are spelled out in writing.
They will also waive or reduce fees for the financially destitute.
They offer personalised advise that is tailor-made according to your situation.
Don’t pay their employees commission (potential cause of conflict of interest).
Don’t automatically steer you into a debt management plan.
Don’t make promises that will put you more jeopardised.
Bear in mind, you didn’t get into this “mess” overnight; it may take some time to get back on your feet.