subject: Discover 5 Ways To Control Bad Debt [print this page] If you find yourself with a large amount debt then you need to take some serious measures before matters get out of control. Below are a number of ways that you can address your debt problem:
1) Create a budget: This is not as difficult as it sounds. You need to identify, categorize and add up your monthly outgoings and subtract that number from your total monthly income. What you will be left with is a clear idea of how much debt you are acquiring each month. It will also help you identify those expenses that are non-essential.
2) Negotiate a payment settlement: The next stage is to contact your creditors and ask them to reduce your monthly loan repayments. It is better to be honest with your creditors and give them a clear account of your financial situation. In this way they will be more willing to help you. Showing them your budget is also a good sign that you are committed and sincere. Ask them if they can also reduce your interest charges on a short term basis until you are in a better financial situation.
3) Get your records in order: Before approaching your creditors get your financial house in order. From your budget figure out how much you can afford to pay off your debts each month. Identify those expenses that are in most need of attention. Do not agree anything with your creditors that you feel you cannot afford to pay back.
4) Debt Consolidation: This type of plan will help you to consolidate all your various debts into one debt that you pay off. A debt consolidation plan can be effective however, you need to negotiate with your creditors to ensure the interest rate is not higher than the interest you are already paying on your existing debts. There may also be some conditions that prevent you from applying for any credit until your debt is paid off in total.
5) Credit counselling agency: People who find themselves with huge debts can become confused, stressed out and in need of guidance and that is when a credit counselling agency can be of great help. However, you need to be careful which one you choose as there are some agencies that are happy to charge you a lot of money for their services. Choose an agency that is not for profit with low service charges.
Many people mistake debt settlement firms for counselling agencies however, these are two different things. Disreputable debt settlement agencies can charge you extortionate amounts of money for their services. Many people can often end up in a worse financial situation after dealing with these types of debt settlement agencies.
However, a reputable credit counselling agency can help you with setting up a monthly budget, teaching you money management skills as well as negotiate on your behalf to lower the interest rates on your debts.
by: Peter Nibley
welcome to Insurances.net (https://www.insurances.net)
