Living through a recession or trying to make ends meet is a difficult task. Inevitably, some of us will struggle managing personal finances from time to time. But this doesn’t mean that we can fall into debt problems without a fight.
When there is a cash crunch, many of us will borrow from friends or family or use saved up cash to deal with money problems, or many of us will struggle on or take out more loans and credits to deal with debts.
When it really gets bad though, many people don’t realize that they’ve wandered down the wrong path or that they need to seek help. So to help, we’ve made a list of some common routes to debt problems that show you need to seek help to get rid of your debt.
Paying bills with Credit Cards
The long road to debt problems started with credit cards when you began paying for essentials like food or bills with credit cards.
When you pay with credit cards remember that not this month but next month you will be paying the amount via real cash. If you don’t pay at regular intervals, interest will rack up. This can cause serious debt problems and affect your credit score.
Again, if you have debts and you are trying to maintain those by paying the bills using credit cards — this will trap you with serious financial crisis. Avoid paying bills with credit card as much as possible.
Ignoring Demand Letters
Of course it’s scary when you start getting Final Notice demand letters through your door, or it can very tempting to ignore them; please don’t.
When you put off dealing with them, the situation will only get worse. Not only will you invite debt woes, but you could also fall into legal trouble.
It is wise not to ignore them and take necessary actions.
Going into rent/mortgage arrears
Managing to pay your rent or mortgage on time can be difficult but once you start going into arrears, it can be difficult to recover.
If you are having trouble making your monthly contractual agreements, it’s probably an indication of an even bigger debt problem which you should be dealing with.
Taking on one more debt to pay another
If you are creating a new debt to pay for another, then you are almost always on the road to disaster. This disaster is called a debt trap. This is the biggest cause of serious debt problems.
Either find a suitable income source or contact your early debt provider for a moratorium/pause of interest at little charge if possible.
Taking out a second payday loan
Although there is a lot of marketing behind them, payday loans are well known to be the last straw or often they end up pushing people into serious debt.
Even worse, when anyone takes out more than 1 payday loan, it’s a clear sign that they are on the road to disaster.
If you couldn’t pay the first one back, there is a very slim chance that you can afford to pay the next one.
Although some of you may be reading with horror, realizing that you have done one of the above, there is no reason to panic. The simplest way to get a grip on your finances is to seek financial advice from a debt expert.