Coping With Your Debt – Solve the problem
Are you in the position where there is a chance of losing your home or your car? Perhaps you’re falling behind with settling your bills, debt collectors are knocking on your door and creditors are harassing you for payment…
Take heart. You are not the first (nor the only) person facing such a financial crisis. Regardless of whether your current situation was caused by job loss, sickness or overspending- being in this position can seem to be a long, dark road with no end or solution in sight. The reality is that this state of affairs can be overcome and that your situation does not have to deteriorate any further.
One of the first things you can do to bring matters under control is to take a hard-nosed look at your cash flow- how much money do you bring in and how much money is flowing out? Write down your total income from all sources combined, and then make a list of all your fixed expenditure (Expenses that do not vary from month-to-month such as repayments on your vehicle, insurance premiums, mortgage payments etc.) Next item would be variable expenditure and here you’d include all expenses that are not fixed (like dining out, entertainment, clothing, etc.)
Do not neglect any item of expenditure, even if it’s a small amount. Be as precise as you can. This will give you an immediate and exact overview of where your money is going to every month. Obviously, there are the indispensible expenses and those are priority number 1. Assign priority scores to the rest of the items. The object of the exercise here is to be sure that all of the basic necessities like food, your house, health, children’s education, insurances, etc. are covered.
You will find a wealth of information on budgeting and managing your money in libraries and bookstores as well as on the internet. There are also plenty of computer programs available that relate to money management. Most have ready-made features to set up and maintain a budget, keep track of your check book, bank account’s and credit cards.
Many people are reluctant to do the following, for very obvious and understandable reasons: If you find yourself in a financial tight spot and unable to make all payments contact your creditors immediately and inform them that you are having difficulty meeting your scheduled payments and inform them of your reasons for having this problem. Most will be happy to co-operate with you and to revise your repayment commitment to a level that is achievable. Do not wait until your account is seriously in arrears and you face having to now deal with a debt collector. If that point has been reached, it means that the creditor has abandoned hope of finding a settlement with you and has resorted to handing over your account to a debt collector.
A good credit counsellor will be able to assist you with quality advice on money management and coping with debt, as well as guide you through setting up a budget and most often offer educational materials and workshops. Trained and certified debt counsellors are knowledgeable on subjects like credit, debt and money management. A good counsellor will sit down with you and do a detailed analysis of your financial situation, with a view to developing a personalised program to solve your financial difficulties. You can expect the initial consultation to last for about an hour. Follow-up sessions may also be suggested.