A look into legitimate options for people in debt

Debt is not a position anybody wants to in. This author knows from experience how scary it can be if your bank account goes into arrears. My story involves a personal loan from the website http://www.wonga.com. This was a couple of years ago and the loan seemed like a good solution to some of my immediate problems. Long story short I was made redundant and was unable to earn the money I needed to keep up my installment payments for the loan. I was lucky in respect that the amount I had borrowed was relatively small, but it was still an incredibly scary situation to find myself in! During my period of panic I did a lot of research into what my various options were when I was unable to make my payments. I’d like to share with you now some of the best advice I was able to track down:

Temporarily suspending the payment installments.

This is your primary option, it’s not a solution of course, but it is the first step to ensuring you have the time to correctly address your financial problem. Talk to your bank manager and explain that you want to block the website from taking a payment out of your account. This is a similar process to what you do when you want to cancel a direct debit payment. You’ll incur a fee for his procedure but it should be a one-off and it’s a much better alternative to have open lines of communication with your bank and the loan company – let them know in advance that their debit of your account will not be successful.

Drawing up a reasonable plan of repayment.

You need to take the initiative here and take assessment of your finances. This includes a report of your monthly expenses as well as your revenue stream. Be as realistic as possible with what you can comfortably afford to pay off monthly on a regular basis. Once you have this established approach the loaning company with your plan of action so at the very least you have opened up a channel of communication that the loaning company can use to eventually get their money back.

Consider alternative avenues of getting the money.

This wasn’t something that I wanted to do personally but I definitely considered it – borrowing money from friends or family. It’s quite controversial advice and I wouldn’t recommend it as a solution but depending on the relationship you have with your loved ones (and their own personal finance situations) you may find that they are in a position to help you out with the payments until you can regain control. The advantage with this option is that your credit score will not be damaged in anyway as nobody is aware of the additional money borrowing except you and your family member. However you should seriously consider if a request for money is really something you want to put on the people you care about.

 

Comments

  1. There are many options when you are faced with debt you can't handle. This only touches on a very few. My favorite rule of thumb NO debt, spend what is in the bank only.

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