People with debt always tend to attempt to run away from it, even when they know that their debt won't vanish by itself.
However, while some just do not bother to clear their debt, others are in denial because their debt is bigger than what they make.
Since they are "helpless" even if they really want to repay the debt, doing nothing seem to be the best policy.
Or is it? It is no surprise that after some time, they find that their debt have grown even more due to hefty interest rates and late penalty charges.
They become depressed, knowing well by now that it is next to impossible for them to be debt free again unless they declare bankruptcy.
Or is it? When you have notorious debt, you need notorious debt solutions, especially if you do not want to go through bankruptcy.
However, the 3 immediate things to put your debt in control now is to: Ensure Your Cash Is Safe Although credit card debt is considered to be unsecured debt, there is one way bank can seize money from your savings account - without prior notice.
It is not uncommon for banks to divert the money from your regular account (ie: your paycheck) to repay your credit card debt from the same bank.
This is because as long as both accounts are under the same bank, they reserve the rights to seize your money.
So, do wise up and start moving your paycheck account away from your credit card issuing banks.
When banks do seize your money, they leave absolutely nothing for you to cover even basic necessity till the next month.
It may take some trouble but at least you won't have a rude shock like so many people did.
You should do this even if your monthly repayment is not greater than your income.
Arrange For A Lower Monthly Payment The next time your creditor call you, do pick up.
Even though collector calls can be rude and irritating, all they want is for you to pay up.
Tell them you have every intention to pay up but you just don't make enough money to pay them.
Your creditor may just offer you a lower monthly payment if you ask.
Be firm and proactive by telling them how much you can commit every month.
For example, you do not wait for them to give you a lower monthly payment but instead, say something like "I am making an effort to repay my debt and I can only afford to commit $110 a month.
Considering my massive outstanding debt, it's either that or I'll have no choice but to file for bankruptcy.
" You'll also have to ask your bank to convert your debt into a loan, meaning you will not be paying high credit card interest as you make your monthly payments.
This is absolutely crucial if you really want to get out of debt, not just meeting your monthly payments.
Build Your Cash Reserve You may be tempted to dump every single spare dollar towards debt repayment to avoid its ridiculous interest rates, but at what cost? Debt experts like Suze Orman have long encourage people to keep some emergency cash with them to smoothen the ride.
According to Orman, one should generally have 8 months worth of expenses set aside to counter unexpected turn of events such as car breakdown, death of a love ones and so on.
Even if you do not make enough to even cover the minimum payments on your debt, make an effort to stash away some money for the rainy days.
The bottom line is to have readily accesible money so that you'll stay on track to become debt free even in unforeseen situations.
You can use your own discretion on your reserve amount based on how heavy your monthly commitments are.
These 3 steps are the instant actions that you need to put in place to manage your debt when you have insufficient income.
They are not some miracle quick fix to your overwhelming debt problem.
When it comes to dealing with debt, the more you know, the more money you can save.
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