Personal Finance – Digs Yourself from Debt

The most important step is to admit the problem and realize that you need to do something about it. Create repay your debt high priority or you can face problems related to major debt such as notification of utility cover or even personal bankruptcy. If one of the following statements is true, you have consumer debt problems:

You have little or no savings and be at your limit on most credit cards. You juggle the bill every month, decide which one to pay and who needs to wait until the next payday, even if it means paying after the due date of the bill and raises the cost of the next delay.

You have taken at least one cash from a credit card account or other credit path to make payments for other debt. Your debt burden (including car payments but not including mortgages) exceeds 20 percent of your income. Most budgets can handle debt loads of 10-15 percent, but more than that are excessive.

If you use a credit card to finance your lifestyle, you live outside the way. It’s time to improve the situation.

Cut cards

Identifying problems is the first step to digging debt. The second step is often difficult for hard-core credit card addicts: cut your credit card. Yep, pull out the scissors and start tasting.

Some credit providers cannot officially close the account until you have paid full, but consider it closed to your use. Don’t, under any circumstances, use a credit card until your debt is fully paid. If you are very inaciful, know that this can take several years. But after you come out from the bottom of the load of excessive debt, your relief has more than redeeming non-credit discomfort for a long time.

Sometimes you need a kind of credit card to make an airline booking, buy goods online, or rent a car. If so, get a check card from your bank. You basically pay cash because money immediately comes out of your current account account. But this way you can take a “credit card” without deepening your credit debt.

Set a good budget and live in it

When planning your budget, be realistic about what you need to spend in each category, but don’t be too generous with yourself. You need to shine in your money belt if you seriously pay your debt so you have money to budget for your debt payment plan.

Contact your creditors

Communicate directly with your creditor and explain to them that you have a problem in fulfilling your payment. Tell me about your budget and ask whether they will be willing to accept payments that are slightly lower for a certain period of time. Many creditors are more than happy to reduce monthly payments if it prevents customers from submitting bankruptcy after all, from their point of view, smaller payments are better than no payment at all.

However, some creditors, prefer to play mustball and force you to go bankrupt before receiving lower payments every month. If you have a difficult creditor, contact the Credit Counseling Agency. These institutions have direct communication experience with creditors and complete solutions for repayment problems.