If you are currently facing a debt problem, you're not alone. We're here to provide you with resources to help you eliminate your debt. If you are on this page, you have likely started to explore the options available to help rectify your financial challenges. Have you found yourself beginning to worry about how much debt you owe? Do you ask yourself: "How am I going to fix my debt?". Do you feel as though you are going to lose control of the situation? It is time to ask for help.
How to FIx My Debt Problems?
So, how do you identify if you have a debt problem? Here are some examples and solutions on how to fix debt problems:
Problem 1: You don't know what you owe or when your bills are due!
Solution 1: Time to review your finances! Allocate a day to sit down and go through everything. Review your bank statements, letters, and emails, and compile all the information about your debts and income in one spreadsheet. Reviewing your budget isn't a full debt fix, but it is the first step in any debt management plan!
Problem 2: You make minimum payments, and those minimum monthly repayment amounts are large!
Solution 2: Speak to your lender and see what provisions may be available. If your circumstances are temporary, apply for hardship. Alternatively, see if your creditor/s will negotiate the terms of your debt. You may be able to extend the term or ask for a lower interest rate.
Problem 3: You struggle to keep up with upcoming bills because you don't have the money to pay them.
Solution 3: You either need to increase your income or reduce your debt. Increase your income by starting a side hustle such as selling items or taking advantage of a special skill you may have, investigating ways to further your education, asking to work overtime in your current job, or seeing if you can negotiate a raise look for a higher paying job. Alternatively, to reduce your debt, you may be able to negotiate with your creditor. If they don't negotiate, consider entering into a debt agreement, whereby an experienced debt negotiation professional in Australia (such as Credit Counsellors) will be able to negotiate on your behalf to reduce the amount you owe by up to 60%.
Problem 4: You owe money to multiple creditors.
Solution 4: Take the time to figure out who your creditors are, what amounts you owe, and what the rate of interest is. Again, see if your creditors will negotiate. Otherwise, it may be less costly to consolidate your debts or enter into a debt agreement if you are having trouble keeping up.
Problem 5: You ignore phone calls, stop opening mail, and will not answer by knocking on the door because you're worried it could be debt collectors.
Solution 5: It doesn't help to "stick your head in the sand." Reach out, make contact, and keep lines of communication open. Whilst it can be nerve-wracking to take this step, by calling up and asking about what step in the debt collections processes you are in, you remove the uncertainty of the situation, which is sure to give you peace of mind. Once you know what the next steps are, you may be able to negotiate by advising the collector that you are ready to address the issue and ask for a 2 week reprieve on collections action whilst you seek professional help. Keep a record of the conversation and make a reminder to follow up with the collection agency within 2 weeks. By keeping them in the loop, they are more likely to cooperate with you. Collection action is taken more often against accounts with no contact than against those who make contact. Communication really is the key debt fix!
Problem 6: You have had to borrow money to cover your bills, and you may be relying on balance transfers, cash advances, or you are often refinancing. You may even find that you have been denied for loans and credit cards.
Solution 6: At this point, it is only a matter of time before you overextend yourself financially and cannot meet the repayments. If you are disciplined enough, start by paying down the debts with the highest interest rates first (firehose strategy. Otherwise, if you are the kind of person who gets motivated by quick results, consider paying down the smallest debts first (snowball strategy). Then use those funds to pay down the next biggest debt, and so on. Neither strategy is a quick debt fix, but they both will help you fix bad debt!
Problem 7: You struggle to afford daily living expenses.
Solution 7: If you need help to feel your family, reach out to a community organisation such as The Salvation Army, Vinnies, Foodbank or OzHarvest. Each of these organisations distributes quality surplus food to those in need. There is absolutely no shame in asking for help… Quite often, those who find themselves in debt are the most selfless, helpful, and kind people out there! When was the last time you put your hand up and experienced the generosity of others? Reach out and be reminded that it is good in the world!
Problem 8: You hide your purchases and financial situation from your family.
Solution 8: No doubt we have all made a sneaky purchase and not told anybody about it! However, when it starts becoming a regular thing, this can be a cause for concern. If you are able to break the cycle without having to raise the issue with others, by all means, do so. However, if it will help you be accountable or lighten your conscience to come clean (and it is safe to do so), set aside a time to sit down with your loved ones and raise the "debt fix" issue in a peaceful manner. Be careful not to bring it up during a tense or important time – instead, pick a calm time and place that falls within your normal routine but won't disrupt it. It also helps to consider in advance your plan about how to fix debt so that you are coming forth with a solution and not just a problem.
Problem 9: You don't have savings.
Solution 9: If you are currently in debt, the concept of having a savings plan might seem a bit far fetched. However, unexpected things happen, and that's life! Whilst paying every spare cent you have toward fixing a bad debt is certainly a disciplined and honourable commitment – it leaves you in a precarious position, and inevitably you will have to skip a payment to cover an unintended expense. Try to set aside 5-10% of your income in an account that is not easily accessible (or send the monies to somebody trustworthy to hold on your behalf if you don't have the discipline not to spend it).
Problem 10: You have noticed a negative effect on your mental and physical health.
Solution 10: Constantly obsessing, ruminating, and worrying about money can definitely impact your overall wellbeing. Reach out to your local GP, or free call a crisis helpline such as Beyond Blue on 1300 224 636 or LifeLine on 13 11 14. Taking care of your health won't fix credit card debt, but it will make for smoother sailing on your journey toward becoming debt-free!
If any of these signs are familiar to you, it's time to face your debt problem. We understand that it can be difficult to realise when you have reached financial difficulty, but the sooner you come to terms with the problem, the sooner you can begin to rectify the situation. Now that you have identified the problem, let's fix it! Contact Credit Counsellors Australia today for your free debt assessment or simply call us on 1300 003 328 or be in touch with our debt negotiators to find the best solutions for your debt problems.