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Debt is an entirely manageable beast if a consumer always remembers to plan for the future and makes considerate decisions. If a consumer can foresee that they will be needing debt help, but it has not escalated to that point, there are self-help steps that a consumer can employ to turn the debt situation around.
- Anticipate interest rate hikes and payment escalation, but always paying 10% above the expected payment. This way when the payment increases, you will be prepared as it is already a part of your budget.
- Save for rainy days and make sure that these funds can be accessed quickly when debt help is needed.
- When a month arises that debts can’t be paid, do not be afraid to attempt negotiations with your creditors. More often than not a creditor will allow a debtor to skip the occasional payment if they can prove that they have a good history of payment and that it is an emergency. Doing this will prevent future clashes with creditors and prove to the creditor that the consumer is looking for debt help.
- Create a budget and do not stray from it. A budget should always prioritise debt payments whilst placing luxury expenses last. This way debt will always be paid and extreme debt help solutions will not need to be sought out.
- Extra money should always be used to pay debts before being spent on more purchases – reducing debt now will pay back the consumer in the long run. It is better to sacrifice now and help yourself with your debts, than to help yourself to unnecessary expenses.
- If money is really becoming a problem – apply for a debt consolidation loan and pay off all you debts now. The repayment on a debt can be much less than your current expenses. You do not always have to work through a debt consolidation agency to secure a loan, provided that your credit record has not yet been affected by poor debt management.
By following these steps professional debt help can be avoided, however if they are no longer a possibility it is time to bite the bullet and talk to a debt counsellor about the options available.
Article written by: Andrea van Tonder 04-2013