Most of us get into debt at some point in our lifetime. There’s nothing wrong with being in debt, so long as you’re making positive steps to get out of it and not simply letting it build up. Here are some important dos and don’ts to consider when facing your debts that could help you to get out of the red more quickly.

Don’t ignore it!

This is probably the most important rule. Nowadays, you can’t hide from debt. If you get a payment letter, don’t hide it in a drawer and hope that your creditor will forget – they will have your details on a computer and will be alerted when you continue to not pay up. Ignoring debt could even make your creditor angry and prompt them to take further action such as hiring bailiffs or taking you to court. You’re far better off contacting your creditor and letting them know that you can’t make the payment – there may be a chance that you can negotiate a better payment plan. At the very least, they’ll be more sympathetic of your situation and less likely to respond aggressively.

Don’t borrow money to pay off your debt

This is another important ‘don’t’. Paying off loans with other loans can swiftly result in a downward spiral of ever-increasing debt. If you’re already in debt, lenders are likely to only offer you high interest loans. A small payday loan or a few months arrears could turn into a huge debt due to the huge interest charges.

Do consider some refinancing strategies

There are a few odd occasions when a loan could help you reduce your debt. Payday loan consolidation is one method of refinancing that could allow you to pay off a high interest loan with a low interest loan and save you money in the long run. You should make sure to do careful calculations before to ensure that you save money.

Do start making cutbacks

Making cutbacks will give you more money to throw at your debts, allowing you to pay them off more quickly. The more serious these cutbacks, the sooner you’ll pay off your debts. This could include giving up a expensive bad habit like smoking, downsizing your home, selling old clothes or driving less often so that you’re saving money on fuel.

Don’t rely on friends and family

You shouldn’t rely on friends and family to pull you out of debt. In serious situations, you may have to call upon them (or they may be called upon as a guarantor by a creditor ), but until then you should try to fix debts yourself. Knowing that people will bail you out could develop an unhealthy habit of getting into debt and never thinking about the consequences, which will only damage your relationships with the people closest to you.

Do know your rights

It’s important to know your rights as a debtor, as some creditors may not treat you fairly. This could include being harassed daily by a creditor at unsociable hours, or having services unjustly taken away for being in debt without a mention of this in the contract. If you need help, you can always hire a lawyer or get in touch with debt counselling services who can advise you on the best option forward.

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