Though the economy is a big downturn, people have not stopped borrowing money. This means that most of us are in a debt that we cannot repay. On an average, each Australian household is in a debt of a little more than six thousand dollars as of April, 2014. As per statistics, 277 individuals are declaring insolvency, every day. That means, one person is becoming bankrupted, every five minutes and 12 seconds. Here are a few tips to make sure that you are not in that list.
If you have any account you have opened in connected to the lenders to whom you owe money, there are a lot of chances that someone would offset money and recover the money, you owe them.
If you have a lot of lenders, you should know that prioritizing is very essential. The high priority debts would include the rent and the mortgage. The second priority will be the utility bills, court fines and council taxes. The unsecured debt will be the last in the list.
know that the right way to pay off the debt is to increase the income and decrease the expenses. You need to make a plan as to how you would earn more and how you can reduce the expenses. This plan would help you to start your process.
Know your rights
Just because you owe them money, it does not mean that you are deprived of your rights. They cannot contact you at unreasonable time and intervals. They cannot persuade you to pay in unreasonably large instalments or increase the payment without prior information.
If you are not able to get through this process by yourselves, it is important to seek help from the professionals. There are many money advise service providers.
It is important to know that paying off the debts as soon as possible, is very essential. Pick the debt that has the highest interest rate and try to pay off the whole amount, as soon as possible. Even if it takes to cut off a few social or semi-essential expenses, it is better to be debt free than being luxurious in debt.