What to do if you have a debt problem

You must take steps to address the problem before it gets worse. Follow the steps below to make a realistic plan on how to get out of debt. With a plan, your goal to be debt free will become one you can achieve.Make a list of all your debts and the outstanding amount you owe, and the monthly repayment.Add up all the monthly repayments and check what remains of your income after you have deducted those repayments.

You will most likely be better off selling an expensive home or car yourself rather than letting your debt problem get to the point where a bank or any other creditor repossesses it to recover what you owe. In this case, you may need a debt counsellor to help negotiate a more affordable repayment plan and to go into debt review.

The aim is to break the cycle of the interest on your debt compounding against you. The more you can find to pay into your debt, the quicker you can reduce the interest and the interest that is charged on that interest, and the easier and cheaper it will be to repay the debt. If you have more than one debt, you can decide whether you want to pay off the highest cost debt first or the smallest debt first.Keeping paying more into your debt until you are debt free.As soon as you are in a more manageable financial situation, set aside some savings for financial emergencies. If you are not prepared for financial emergencies, you may be forced to borrow again.

Source: Loan Digest (loandigest.net)

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