How to Resolve Your Debts

From BudgetPlanners.net – If you have a debt problem, you don’t have to panic about it, but you should also not let it be. It would not go away on its own. Here are some things you should do if you have to deal with debt problems:

  • Figure out how much you owe.
  • Make a list of debts, arranging them in order of urgency to pay them off.
  • See if you have some extra bucks to pay for your debt, and if you do, figure out how much.
  • Deal on priority with the debts that are more urgent than others.
  • Evaluate your options to pay less urgent debts, and work out a way to pay them off.
  • Contact the people you owe and make arrangements to pay them back.
  • Sort out your options if you do not have money to handle your debts.

Sorting Out the Most Urgent Debts

First things first, make a list of all the companies and people you owe. Collect basic information for each debt like the name and address of the creditor, a copy of the signed loan agreement, and their account number. It’s good to keep debt receipts together so that they are easy to find later.

All your debts have different due times. It is better to figure out debts that are more urgent than others. This may be because of promised dates or the consequences of not paying them can be serious. These type of debts are called priority debts.

If you have spare money, you should make sure that you pay the priority debts first before engaging with other less urgent loans such as credit card debts, overdrafts, and other loans. The debts that seem less urgent are called non-priority debts.

Priority debts

These are the most urgent debts and should be paid off as soon as possible. These may include your residency rent or arrears. Not paying these can get you evicted. Similarly, gas, phone, water, and electricity bills should be a priority as you will get your supplies disconnected if you don’t pay them. If you have any court fines or penalties of any sorts, you should get them off your list. Delaying them can land you in jail. Income tax should also be of high priority as not paying it can lead to prison time.

You also may have other debts that might be more important to pay. For instance, if you rely on your car to move around, you should prioritize paying for your car. You need to be careful in deciding your priority debts.

What Should You Do Next?

Once you have figured out the total amount you owe and sorted out your urgent and less urgent debts, you have to find out whether you will have enough bucks to pay for them. To do this, you will need to make a proper budget. If you reduce your spending on outings, you could help yourself with the bills. Also, you can use different ways of making a budget to see where your money goes. That will surely help with tackling all the budget and debt related problems.