DEALING WITH DEBT

Debt is more common to us than providing an explanatory meaning of it in this place. Therefore, if you’re dealing with debt and it’s ceasing your progress in anything, making living hard for you, this article is for you.

It is advisable to deal with the problem straight away – the longer you ignore your debts, the worse the situation becomes.

MAKE A LIST OF EVERYTHING YOU OWE

You should sort out everything that you owe and who you owe it to. The people you owe anything will therefore be known as your creditors. While you will be known as a debtor.

PUT YOUR DEBTS IN ORDER OF IMPORTANCE

The type of debt that requires you to act fast is known as ‘priority debts’. This is the type of debt whereby serious actions might be taken against you if you do not pay what you owe before due time. In this kind of debt, one could lose his home, forfeit his access to his legal rights or even go to prison. Examples of priority debts are:

Mortgage repayments

Secured loans

Rent

Rates

Utility bills

Taxes

Court fines

Any of your debts that falls into the priority debts should be taken cared of at first before considering non-priority debts.

Examples of Non-priority debts:

Credit card and store card payments

Bank loans

Overdrafts

Catalogue repayments

Money you’ve borrowed from acquaintances

Some of them can not be ignored, but you don’t need to deal with them as a first priority.

WORK OUT A PERSONAL BUDGET WITH RESPECT TO YOUR INCOME

Calculate a weekly or monthly budget to see the relationship between your income and expenses. it will also reveal to you, where you can save money. This kind of budget will help you decide what you can easily afford to repay your creditors. This will make you to be realistic.

GET YOURSELF INDEPENDENT ADVISOR

More than enough options are available for you in dealing with debts. For example, You can make an arrangement with your creditors or more formal ones that debt specialists can organise for you. This will make each of your debt more feasible to sort out.

It is very important you get independent advice to help you find the best way to fight your debts. The advice should be from an experience person.

If it is a business you’re running that’s putting you into debt, then the advisor should be from someone who’s a professional in such business.

  ✓TALK TO YOUR CREDITORS

This should be done with your priority debt creditors first

Once you know what you can afford to repay, you should talk to your creditors about your situation and how you will sort it out.

Always be realistic about what you can afford to pay. Stay away from unrealistic assumption.

When you already deal with your priority debts, then you will have little or nothing to fear about. You should take your non-priority debts serious also. Don’t take it for granted, making promises you can not fulfill.

Since nothing can be like be a debt-free person, it’s advisable to start thinking about the non-priority debts as soon as you are done dealing with the priority debts.

Localnaija

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