Struggling With Debt?

During your lifetime you are more than likely to experience some form of debt. With student loans, mortgages, credit cards and financing your car, it is a real possibility that during some period of your life you will owe someone else money. Over the last 10 years it has become increasingly more common to borrow money. This is of no surprise as the cost of living has increased dramatically in this period.

It isn't all bad news.

Yes, debt can be tough. With that being said, there is information and tools out there to help you manage your debt. And you've come to the right place.

Firstly, let's identify the various sources of debt.

How Debt Arises

It is important to identify where the debt is coming from, and are you paying it off. I touched on a number of possibilities earlier, however it is not limited to these. As mentioned you may be paying off student loans, mortgages, credit card debt, or paying off your vehicle.

It may also be medical bills, a gambling addiction, poor money management, a reduction in salary or even divorce, that leads to your debt. It's important to pay back what you borrow, it's also vital to make smart decisions to ensure financial safety.

Negative effects of debt

Considering the negative side effects of being in debt is necessary in order to warn you of the potential risks. These effects may be in extreme cases, however they should alarm you to improve your financial situation.

These effects include:

• Wage reduction. Your financer may look to have your wages cut back, in order for you to start paying back what you owe. Essentially, money will come out directly from your wage every month.

• Eviction. If you can't afford to pay your rent on time every month, your landlord may need to evict you.

• Foreclosure. If you are unable to pay your bills, you may lose your home.

• Rash decisions. Money problems can be very dangerous, and even breed more problems. People in desperate situations, sometimes make rash decisions in an attempt to win/receive money for something that is potentially a high risk action.

Side effects are not limited to these 4, although they are the most common effects and you should become aware of them. This should be a wake-up call.

Debt Relief Options

The good news is, help is out there. There are many solutions out there for you. A range of tools from programmes to strategies, uniquely designed for your situation and to help you out. Many companies will recognise that everyone's scenario is different, that is why they offer multiple debt relief options.

These include:

• Minimum Payments. You make payments to pay off your debt, however you may pay 2-3 times what you originally owed.

• Credit Card Modification. Have someone step in and work on your side, to negotiate a settlement due to your hardship. Although fees and interest may temporarily increase what you owe.

• Credit Counselling. Financial tools to help with budgeting, includes one monthly debt payment. Keep in mind you can no longer use credit cards.

• Bankruptcy. May remove all your debt relief. But this influences your ability to buy a home, what your insurance is, future loans and much more.

• Debt Negotiation Strategies. Professional negotiators work on your behalf. Typically resulting in a sum of less than you owe. But, you must show financial hardship.

Each strategy has advantages and disadvantages, which is why it is vitally important that you consider a number of factors before seeking any option.