Jun 22, 2011, 2:26 PM
If you are wondering how bad your debts are, as the old adage says, size is not everything. What counts is your debt in proportion to your ability to repay.
There is no such thing as an unsolvable debt problem.
It might not be easy or quick, but there is always a route. Yet by its very nature, debts are urgent, they compound rapidly over time, and can speedily spiral into trouble. The earlier you take them on, the easier they are to deal with.
While many consumers are unaware of their risks with unpaid debts, debt is not just a finance issue, but one that feeds into all elements of your life, the solutions are wide and varied; whether it is cutting interest costs, budgeting, challenging the legality of your debts, or simply where to find real one-on-one help.
Too many consumers feel that their debts are overwhelming and there is nothing they can do other than file a bankruptcy.
Consumers believe those awful tales spun by collection agencies of impending doom, especially about garnishment and seizure of property.
Due to lack of information, many consumers turn prematurely to bankruptcy but this should not be used until after all options are exhausted, including the settlement procedures.
In some cases, having your debt go into collections can be a blessing!
No one ever wants to get into debt. It comes from spending money you do not have.
This could be for frivolous reasons, or you may have had a horrible change in circumstance, like a partner dying, personal illness, divorce, mental health problems or losing your job.
The prime aim of this piece is to cut the cost of your debts, yet if you do that without examining the bigger picture of all your spending it will be wasted.
That is why, in this piece, our prime focus is on cutting the cost of your debts themselves, rather than looking at the bigger picture of all spending.
It is very important to get on top of debts as soon as possible. Do not default or miss payments.
Let your lender know if you are going to be unable to pay; it is always better to talk to them, though of course preventative measures such as reducing interest, expenditure, and being a smart consumer are the best form of action.