Dealing with Debt Stress

Australia’s household debt is at unpreceedented levels. Many everyday families are struggling to keep up with mortgage and rent repayments as well as pay for utilities and put food on their tables.

Some are faced with the difficult choice of housing vs food. Can this really be the lucky country down under?

National Debt Helpline is receiving numerous call from people experiencing housing stress while juggling out os control credit card debts.

According to stories coming from the National Debt Helpline, instead of looking for a radical solution from qualifies professionals, when the financial chips are down, some Australians choose to hold on to unaffordable credit cardsĀ  and pricey payday lenders, that offer a quick fix.

These companies offer a quick debt fix which is nothing more than yet another expenssive loan on top of already uunaffordable debts.

There are many Debt Professionals who can assist people experiencing financial stress by renegotiating outstanding debts, stopping debt collectors, consolidating expensive debts into cheaper alternatives and stop interest from continuing to accrue. What you must avoid at all costs if you are experiencing financial stress is take on more credit cards or additional debts just because these may be offered.

Secured Debts

Secured debts such as a mortgage or a car loan need to receive first priority in a family budget. If you stop paying these you may loose the assets which are securing these loans. However there is always scope to negotiate temporary debt relief with your lender. Banks will often be prepered to offer a customer temporary relief in a way of reduction in repayments or even a repayment holiday. However to qualify for any of these you must be upfront with your lender rather than default and go into hiding.

Unsecured Debts

Unsecured debts such as credit cards and personal loans can receive secondary priority if you are struggling to make set repayments. However even these are best to be discussed and negotiated rather than simply be ignored. Getting Debt Professionals on your side to speak to your credit providers can be invaluable. There may be scope to enter a Debt Agreement or simply attempt to informally negotiate the outstanding debts down to a level you will be able to repay. There is no point borrowing more in order to try and keep up with the repayment of debts which you know that you will never be able to repay on your income. This is a trap of escalating debt that will brinng you down into full bankruptcy.

Budgeting is the Key

Irrespective of the source of your debt problems the answer would always be to set up a Budget and make every effort to adjust your cost of living to meet your available income at least going forward.

One must work out what money’s coming in, and how much is going out, and try to bring the two into alignment.

If Budgeting is just not your strength, there is no shame in seeking professional advice. An expert will go through your debts, income and expenses with you and help you find a way out of your debt maze.

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