Spare change is hard to come by when your bills are overdue and debt collectors keep calling. It is also tough to keep tabs on due dates and to ensure there is enough money for basic expenses like food, rent, and travel.
Debt becomes hard to manage due to accruing interest and charges on credit cards and personal loans. Most credit cards charge approximately 20% interest, and personal loans hover around the 15% mark. When times are tough, it is hard to pay this off along with overdue fees and charges.
It is hard to establish a payment plan. However, a bit of help from the credit card issuer makes it easier.
It is essential that you have a realistic budget drawn up for household expenses. Use the budget planner available on the Money Smart website. This helps you establish any surplus funds that are available for your creditors. Also make sure you have some money saved up for a rainy day, in case of any unexpected expenses that may arise.
Make contact with your bank or credit card issuer and get them to review your account. Discuss your options with them, including a short-term moratorium or reduced interest while you plan to pay your arrears. Ask for their hardship program and check your eligibility to obtain some relief.
Stick to the arrangement if you are granted hardship. This helps to ensure you stay on the reduced payment terms for the duration of the arrangement. If you are not granted a moratorium or reduced payments, it is essential to understand why and work towards qualifying for this arrangement. Most banks will oblige provided you have the right reasons and documents supporting your claim.
If you need a long-term solution, a debt agreement may be a viable option. This consolidates your unsecured debt to be presented to creditors as a proposal to be paid off at a reduced amount over time (generally 5 years). A Registered Debt Agreement Administrator (such as ADAIS) can help you administer the debt agreement and ensure all payments are received and disbursed accordingly. The debt agreement is a good option for those whose circumstances have changed. Registered Debt Agreement Administrators are regulated by the Australian Financial Security Authority (AFSA) and are required to undergo a strict audit of their policies and procedures.
Debt Agreements have grown to become one of the most effective methods to manage debt. You can also use them to obtain relief from the long term spiralling effects of credit cards, personal loans and other unsecured debts.
ADAIS Can Assist You
At ADAIS, we can help you map a plan to manage your debts and ensure you get adequate debt relief especially when you see no way out of your current debt situation.