No matter the scale of your financial crisis, there is always a way to handle it now to prevent your situation from getting any worse. In a tough economic situation, people with or without jobs struggle to pay off their debts. Credit card debts, student loans, overdrafts or  and personal loans are some of the most popular debts people need to settle almost every year.

As your responsibilities get bigger, secured loans such as student loans,  your mortgage, car hire purchase sometimes makes good sense. it’s your primary duty to make sure you don’t borrow more than you can afford to pay back, and its important to look at your options for the best rates.

–Change your spending habit-immediately

Access your current buying habits and make immediate change to it to prevent further debts. Cancel unnecessary memberships to leisure activities you can do without for now, and other monthly recurring-cost on entertainment in your home. Check to make sure that you don’t incur more charges if you must break a contract early example phone or broadband subscriptions.

Look out for alternatives to products you buy on daily basis. There are always discounts or cheaper prices of the same goods from different retailers or brands. You should consider postponing purchases on accessories you don’t really need for now. Consider selling off things you don’t use or have not used for a long time now on eBay. Take hold of your current spending and you will be on your way to preventing further debts.

–Don’t ignore demand letters from creditors-ever

Notwithstanding how much debts you owe, the best strategy is always to take stock of current situation and come up with a payment plan as soon as possible. The worst thing you don’t want to do is to ignore letters from your creditors demanding your attention or requesting you to give them a call about your situation and how you intend to handle it. Take control and contact them as soon as possible ideally by phone first to acknowledge the debt crisis. Even if this is just to say that you want to work out a suitable  repayment plan.

You could also contact a professional debt advice on what you should be doing right financially. Iva  can help you find a debt solution that best suits your own situation and personal needs.

—Negotiate new payment plans ( if possible)

Once you know who to contact to acknowledge your debt, negotiate on a new payment plan with your creditors. If your current financial situation makes it difficult to fulfil your current monthly payments,  negotiate lower monthly payments until your situation changes. Prepare to give a better reason to an initial “no” response from most credit companies– ask to speak with a manager or supervisor.

Discuss every conceivable option to allow you pay the minimum amount possible based on your current income and expenditure. Sending regular token payment amounts may help instead of the no response or no payment.  You could even ask  them to temporarily freeze the interest and late repayment charges as that they are adding to your loan and because of this it can affect your ability to pay off your debts on time.

Ask your creditors not to issue any legal proceedings until every available option is looked into to protect your financial reputation. It’s all in the negotiation. If you negotiate right you can come to an agreement that can benefit you in the future.