My Debts Are Out of Control! What Can I Do?

The weight of debt is like a crushing anvil above your head. It never leaves, and it edges closer and closer to complete collapse. Living with this dark cloud and unrelenting burden is awful. If you’re reading this, then you already know the pain! Your debt has gotten way out of control and you’re struggling to cope. Trust us, we’ve been there, we understand your pain. Today we’re going to help you tackle this mountain and get rid of it for good.

image source

Face up to it

The first thing you need to do is square up to your debt. Look it in the face and understand the enormity of what you face. Trust us, this is the worst part of the whole process. When we’re in debt, we tend to avoid looking at our statements and never glance at the bank account. That needs to change. Dive in, add it all up and get a sense of what you’re working with. It’s big, but you knew that anyway. Now you know exactly how big.

Declare Bankruptcy

One option is to simply declare bankruptcy. You’ll apply to the courts and they’ll judge whether you reach the necessary criteria. Bankruptcy will wipe your slate clean, but at the cost of many of your assets and reputation. But, it’s a chance to rebuild your life, and you can still borrow money to get started. Through FHA loans and bankruptcy, you can begin fresh and take a new approach.

Prioritise your debts

If you don’t want to risk losing assets or reputation, there’s no other choice but to pay it all off! It all starts by prioritising the imminent amounts. It’s probably best to start with your credit cards. Tackle the highest interest cards first by paying off more than the monthly minimum. (Keep paying the minimum on your other cards too).

Negotiate with your lenders

Most of those in debt are scared to call their lenders and negotiate a deal. They think they’ll simply draw attention to how bad things are. In fact, the opposite is true. Your lenders want to get their money back, and they’ll be more than happy to make arrangements. Speak to someone and make a deal that works for both of you.

Consolidate your loans

The difficulty with debt is keeping track of what you owe. There are overdraft fees, multiple credit card bills, mortgage payments and pay day loans. Keeping on top of them all is a nightmare. Consolidate them into one payment and the process will become much simpler. You’ll owe money to just one lender, and you’ll keep track of the payments.

Change your lifestyle and make sure it doesn’t happen again

While you’re paying off the debt, make critical changes to your lifestyle. Downsize your property and start budgeting correctly. Live a more frugal life for a period until the debt is gone. Once you’ve finally cleared the burden, take steps to ensure it never happens again. Cut up the credit cards and live within your means. Set yourself strict budgets and start saving!

Cutting debt out of your life is one of the toughest things you can do. Follow these steps and you’ll finally be free of the dark cloud. Good luck!