This contributed post is for informational purposes only. Please consult a business, financial and legal professional before making any decisions. We may earn money or products from the affiliate links in this post.
No one ever intends to get themselves in debt, but it’s so easily done. Even those with the best of intentions and who are savvy financially can find themselves in this predicament, and when you’re shackled by debt it can be an incredibly stressful time.
If you’re being chased by creditors and are receiving letters, phone calls, bailiffs visits and more here’s what you need to do.
Speak To Your Creditors
You can either speak to your creditors directly, or speak to a debt management company who will contact them on your behalf. Either way, letting them know you are in a position where you can no longer fulfill your original agreement is important. Don’t bury your head in the sand as they will continue to chase you. Inform them of your circumstances and see if you can come to an agreement for reduced payments. In some cases they may be willing to accept very small token payments for a number of months until your situation changes.
If there’s no way anything will get any better for a while, you may have to discuss your options with a bankruptcy lawyer. You will have to sell any assets you have but your debt will be written off and creditors will not longer be able to chase you for money.
Rework Your Budget
Once your creditors have accepted a lower monthly payment, your next step would be to rework your budget. You need to organize your money so that everything is being paid and you’re not falling into arrears elsewhere. Work out where you can make cutbacks, from luxuries to groceries- writing meal plans and buying less big brands are easy ways to save money on food. See if there are any other large savings you could make- instead of driving to work every day could you walk or get the bus?
Instead of paying for a gym membership could you go running at the park? Any money you have coming in should be used correctly- bills and debts should be a priority. Tighten the belt on extras for a while until you can afford them again.
Earn More Money
Finally, to get debts paid off more quickly you could work on earning more money. You could take on extra shifts at work for a while, or ask your boss for a pay rise. You could work from home during evenings and weekends doing some freelancing. There are lots of sites online allowing you to write, design or utilize your talents to earn money so they’re worth looking into. Use any extra you earn to pay down your debt balances, getting rid of them as quickly as possible.
Put in all the extra hours you can, even if it’s just in the short term. Paying off debt or at least getting down to a manageable levels can be a huge weight off your mind.
Have you ever been crippled by debt, and if so- how did you break the shackles and free yourself?