subject: Debt Management and How to Stop The Madness [print this page] Debt Management and How to Stop The Madness
If you are like many us feeling like you are just treading water in a sea of debt then no doubt you are looking for a financial life line. The only way to escape from this nasty situation is to look at it as your enemy, because you can be sure that it is.
The debt trap is an easy one for most anyone to fall into that is not financially stable. In fact, it is financial instability that leads people into debt, and to the place where they need help with debt management.
The hard part about owing money is, it's like a snowball. Once debt starts to grow it just never seems to stop. The only way you can get out of this financial system is to first stop the debt growth, then melt the financial snowball.
Once you are in debt trying to stop the growth is a lot easier said than done. So if you are going to look at debt as your enemy, then the best way to beat your enemy is to learn all about him.
This means you need to sit down and take on the unpleasant chore of listing all your debts. Most people dread this first step. The argument always is that they know what their debts are and this true, but seeing them on paper is a reality check that is needed. This exercise is not meant to dishearten you, but is meant to be your starting point.
Now on one side of the paper is your debts, and on the other side you want to list your income and your resources. Don't get discouraged if your debt column bottom line is higher than the bottom line of your income column, as chances are this is the way it is. So looking at the fighting the war scenario, all these debts are your enemies, and all your income is your weapons. In this case those the enemies outweigh the weapons.
So this means you need to contain your enemies. To do this you need to contact your creditors and see what you can negotiate with them. Start by asking them what is the best they can do for you. In many cases debtors will be willing to lower payments.
Once you have found out what is the best they will offer you, and doing this for each debtor, you have now compare these payments with the income you have coming in.
If it turns out that now there is enough money to cover all the debts then this is the first positive step of your debt solution, but certainly not the only one.
If it happens that there is still not enough money to cover all the payments, then you need to figure out how much you are short in respect to your bill payment budget. Then divide the shortage by the number of debtors. Then go back and approach each of the debtors with the amount that you can afford to pay them. Most often this will be acceptable until you can get on your feet.
These steps outlined are just the very beginning of debt solutions. There are many steps that you can take and combine to help you get out of the financial waters that you are currently drowning in.
