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I Owe Money - What Can I Do?

Don’t worry, there are many, many people in your situation. After all, the whole economy runs on debt and without it the economy would collapse. Countries would go bankrupt overnight if they didn’t use debt to finance their economy.
There is actually nothing wrong with debt as long as your salary or wage pays off your living expenses (mortgage, utility bills, food etc…) as well as your debt bills such a credit card bills and loans. However, so many people are so close to financial disaster if anything were to upset the outgoing/incoming balance.
Financial crisis can be due to many reasons such as losing your job, illness or a medical emergency could take up lots of your savings. A divorce settlement can also bring you to breaking point. Is doesn’t take a lot to send you spiralling into financial debt and worry. As the months progress you will get letters and calls from your mortgage lender, utility companies as you head towards financial meltdown. So what can be done to alleviate the debt you are in?
Firstly, take time out and relax. You can’t sort out anything if you are stressed and if you are not careful you may get ill which will only add to your problems. You cannot make rational and potentially critical financial decisions if you are anxious and stressed out. You may as well relax because your debts are not going to change whether you are stressed or not.
Next, collate together all the bills that you currently have to pay and sort them out in the following order:
  1. Housing costs such as mortgage or rent. You don’t want to lose your home if you can help it. Also secured loans against your property.
    2. Essential food supplies, medical and health covers – basically things that you need to survive, day to day and in an emergency.
  2. Local government bills and federal taxes. The federal government has powers to seize your assets if you do not pay. You could also end up with a criminal record.
  3. Utility bills. You want to avoid having your gas or electricity cut off – this will just make your life miserable, especially during winter time. You can often make part payments to these services whilst still maintaining the services to your property.
  4. Other bills including credit card bills, loans and any other borrowing from friends or relatives. These payments can be made with a monthly minimum amount so contact the lender and explain your situation. This may have a bearing on your credit rating but at least you are managing these debts in the most effective way possible given your circumstance.
You need to change your mindset and approach towards your debt and think more positively. Instead of worrying day after day how you are going to get through the day concentrate and focus on your strategy on how you will get out of debt. You can do it, only you can do it and is it possible to get out of debt.