In debt, but don’t have the funds to pay that debt back? Such a crippling debt can make you feel as if you’re drowning. First of all take a breath. This isn’t the end of the world and there are options out there to get you back on track. Here are the main steps to dealing with such heavy debt.
Don’t ignore it – it won’t go away
Hiding letters in drawers without opening them and refusing to answer the phone is the worst thing you can do. A creditor may eventually seek legal action, assuming you are a crook. Make an active effort to talk to your creditor and tell them your current situation. You may negotiate a way of paying back the money at a more gradual rate or even delay payment. Ignoring them will just anger them and make them less sympathetic to your cause when they finally get hold of you (which they will – either via bailiffs or police).
Being in debt means either upping your income or spending less. The latter is often easier and may require you to make some serious cutbacks. This could include selling your car if you don’t need it for work, freeing yourself from fuel and insurance costs. This could include downsizing to a property in which the rent or mortgage is less. It could even be something as small as budgeting your food bill or quitting subscriptions to TV or music streaming platforms. Remember that these cutbacks are only temporary – once you’re out of debt you may be able to return to your old lifestyle, providing it wasn’t this lifestyle that got you in debt in the first place.
Get financial advice
It could be worth hiring financial advice in order to get yourself out of the red. There may be options out there for you such as debt consolidation loans that don’t require a high credit rating. Such a loan can pay off all your existing loans, putting all your debt into one manageable place. So long as you pay off this debt consolidation loan on time, you won’t have any problems.
Consider legal help
Knowing your legal rights is important. Hiring a lawyer to deal with a collection agency may be required if the agency are asking too much of you. You may also need a lawyer to help you provide a defence against a company that may be suing you an unpayable amount. Whatever the case, an attorney will be able to explain your next course action and stop you making any wrong moves that could get you into a worse predicament.
If a debt collection agency is harassing you, you may be able to report it to the police. This includes threatening or violent behaviour, calling outside permitted hours and refusing to show written proof of debt. You may rightly owe the debt, but that doesn’t justify a debt collection company to act in a brutish manner which could well be illegal.