How to Get Out of Debt: Simple Steps to Recovery
Would like to get out of debt? Being in debt can be debilitating and cause a lot of stress in your life.
How did we get into debt?
Money Management is an essential life skill, but unlike English and maths, it isn’t taught at school. The money management skills you have now have been developed over time on a trial and error basis – you try something and it either works or it doesn’t. Unfortunately, this trial and error management strategy can get people into debt, and once they are there, they can’t get out.
According to the Australian Financial Security Authority (AFSA) 24,438 people declared some kind of insolvency (Debt Agreement or Bankruptcy) in the 2013-14 financial year. The main cause of their debt was from unemployment or loss of income. This was followed by excessive use of credit, domestic discord or relationship breakdown and then ill health. This just goes to show, proper planning and money management could help prevent you falling into debt. But before we talk about how to prevent falling into debt, we will talk about how to get out of debt now!
How to get out of debt now!
Acknowledge you need help
When debt is left unattended it can get out of hand. It is hard to speak to your creditors about your repayments, especially if you have no way of paying them. But facing the problem head on and speaking openly and honestly about your situation is the best thing you can do. Your creditors may give you a reprieve and put a repayment plan in place or offer some other options to help you get back on your feet. if you just ignore your creditors they could send out debt collectors, sell your debt to other companies or even reposes your home or car if you offered it as security. But admitting you have a problem, you will open a world of solutions to help you get out of debt.
Get a hold on your finances
Now you realise you have a problem, the next step to get out of debt is knowing exactly what you owe and to who. Write a list of all your loans, bills and repayments. The more details you can collect the better. Try and recall how much you borrowed, how much is left to pay, what your repayments are, who you borrowed from and how frequent the repayments must be made. It is a good idea to apply for a copy of your credit file. You can have a copy sent to you for free within 10 days once every 12 months. Your credit file will give you and idea of where you sit with your repayments. Having defaults and judgments marked on your credit file will limit the debt relief solutions available to you.
There are a number of options to get out of debt in Australia, you just need to know where to look to find them. You can call a free financial counselling service from wherever you are in Australia. These financial counsellors will learn about your situation and suggest ways for you to improve your finances and get out of debt. The number to call for this service is 1800 007 007. Debt can be pretty stressful and can have an impact on most areas of your life. You may feel as though you need to struggle through it alone. But if you are comfortable, try to confide in a few close friends and family members. Their added support can be incredibly helpful through this difficult time.
Explore debt relief solutions
If your debt is quite severe you might want to seek the help of a debt relief solution provider. Debt Rescue offers a number of debt relief solutions including Informal Debt Agreements, Part Nine Debt Agreements and debt refinancing through an afiiliate business. At Debt Rescue we take the time to understand you and your situation before recommending a tailor made solution to fit your debt situation. No debt is the same and there is no one size fits all solution.
Get out of debt now with Debt Rescue
Debt Rescue has a number of positive solutions to people in debt. If you want to get out of debt now, call them and Talk to an Aussie Who Cares. They can take you through the benefits of each solution available to you and give you the knowledge and power you need to tackle your debts head on.
Debt Refinancing and Debt Consolidation Loans
Through our affiliate partner, Positive Solutions Finance, we are able to offer our clients Debt Refinancing and Consolidation Loans. Positive Solutions Finance specialises in loans for bad credit and can help you find a small loan to tide you over or a large consolidation loan to help you get on top of your debts. A debt consolidation loan is a loan large enough to pay out all your outstanding debts. Essentially this rolls all your debts into one easy-to-manage repayment and you have the potential to save on interest and fees by eliminating all but one loan.
Informal Debt Agreement – Debtstroyer Agreement
An informal Debt Agreement is a contract between you and your creditors outlining a new payment arrangement you can afford. An informal debt agreement is usually arranged through professional debt negotiators. As the agreement is informal it is not noted on the National Personal Insolvency Index and won’t appear on your credit file like a Formal Debt agreement would. This solution is ideal for people who can’t enter an act of bankruptcy.
Part Nine Debt Agreement
A Part Nine Debt Agreement was introduced as an alternative to bankruptcy nearly two decades ago. They can reduce the overall debt amount, freeze your interest and get your creditors off your back. Entering a Part Nine Debt Agreement is an act of bankruptcy and your name will be listed n the National Personal Insolvency Index. However they offer a viable way out of debt for people experiencing financial hardship.