Dealing With Unhealthy Debt: The Dos And Don’ts

Many people have debts. So long as you’re able to keep up with repayments, there’s no limit as to how many debts you should have. However, if you find that you’re falling behind, it’s a clear sign that your debts are becoming too much and that you need to do something about them.

Digging yourself out of debt isn’t easy. Different debts need to be dealt with in separate ways and you need to take steps to control your spending. Here are just a few dos and don’ts that will help you to eliminate that debt and get back to being financially stable.

Don’t ignore your debts

You can’t ignore debts and hope that they’ll go away, because they won’t. If anything, they’ll just pile up and eventually your creditors may decide to take further action such as hiring debt collectors or even taking you to court. As soon as you are unable to keep up with payments, you should let your creditors know. Some creditors may be sympathetic and they may freeze payments for that month or arrange a payment scheme in which you pay in smaller instalments. If stop paying your repayments and ignore your creditors attempts to contact you, you’ll just end up angering them and they’ll be less likely to want to help you out. If the worst case scenario happens such as a creditor threatening to repossess your car, ensure you familiarise yourself with local laws such as consulting with a Massachusetts Auto Repossession Lawyer or your local equivalent.

Don’t keep paying other people’s debts

If your debts aren’t yours and you’re struggling to pay them, it’s time to put your foot down and hand over the responsibility to the rightful owner of these debts. This debtor may be a friend, a relative or a partner. It could even be an ex-partner, in which case you may even have to hire family law solicitors to help settle the problem. Even if you don’t want to hand over the entire debt, you should try to get them to contribute something so that it’s not all your problem – this way it will be less of burden for you.

Do start budgeting

Budgeting will help to ensure that you’ve always got enough money in your bank at the end of each month to make your repayments. Keeping to your budget may involve cutting back on certain expenses. There are budgeting apps that can help you to keep on target. Make sure to also use online banking to regularly check exactly how much is in your account. If a physical calendar or diary helps you can also use this.

Don’t make cutbacks you can’t sustain

Whilst you do need to make cutbacks, these need to be cutbacks that you can keep. A lot of people go too extreme without giving themselves room for treats. For example, if you eat too many takeaways, consider treating yourself to one per month rather than cutting them out completely – knowing you’ve got that one takeaway to look forward to will keep you motivated, rather than you feeling totally unmotivated resulting in you giving in completely. Other cutbacks to consider could include driving less and walking more, drinking and smoking less and possibly cutting down on snacks.

Don’t take out any more loans

If you’re already struggling to pay your current debts, you don’t want to be bringing a new debt into the chaos. This may seem obvious, and yet many people continue to take out debts. If you need to raise money in a hurry, consider if there are any other ways of doing it that don’t result in debt. This could include working more hours, selling possessions or releasing equity. Only take out a loan if it’s an absolute emergency such as urgent home repairs or expensive vet bills.

Do consider refinancing

There can be times when it’s sensible to pay off a loan with another loan. This is known as refinancing and it could save you a lot of money in the long run. For example, if you’re paying huge amounts of interest on a debt that seems to be rising no matter what you pay off, it’s a good idea to pay this off with a lower interest loan to stop it building. If you’ve got lots of debts going out on different dates that you struggle to keep track of, you could even take out a single debt consolidation loan to pay all of these debts off so that you’re left with one single payment each month. There are lenders that specialise in refinancing that you could try talking to.

Do try to negotiate with your creditors

Creditors are often open to negotiation and you should contact them to see if they can offer a better deal if interest rates have gone out of control or the repayment instalments are too large. Whilst it’s unlikely you’ll be able to wipe the debt, your creditors will likely be able to find a more affordable way of paying off the amount. It’s better for them to receive some of the debt back than none of it at all, and so most creditors will try to do what they can to help you pay the money back.

Do consider hiring help

There are debt counsellors and advisors out there that can help you to get out of debt. As well as possibly negotiating with creditors for you and finding ways to refinance, they may be able to help you with the emotional stress of being in debt, helping you to view your debts more positively as something you can escape. Some of these advisors are free whilst others may charge a small fee for their services. Even if you do have to pay them for their services, it’s worth the costs you’ll save in the long run.


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