Troubleshoot as soon as possible for a debt trap

Whether you lost your job or necessarily had to buy a new stove, it doesn’t mean that a debt trap is sharpening your teeth . But it is not good to put your head in the sand in front of the problems, but it pays to face them. The loan itself does not pay off and the problems do not miraculously disappear. Let’s read 4 tips on how to avoid a debt trap.

 

Find out what awaits you and under what conditions

If you suspect problems on the horizon, take the contract and read carefully what are the penalties and charges for late repayment or deferred payment. It won’t be a pleasant reading, but you should know what you’re up against.

Tip: Sit back and think about your options. Maybe your family can help you, or you can cut your monthly expenses to a minimum, and you can still make payments.

 

Contact the creditor and deal with the situation

Contact your creditor immediately after reviewing the terms and conditions . Many offer postponement of payments or similar services, but be careful not to hide hidden charges. Study everything in advance so that you do not get persuaded to do something that would only make your situation worse.

Tip: Definitely do not hide the situation from the lender . Stopping repayment without a word is worse than trying to actively solve problems.

 

 

Avoid debt relief companies

Avoid debt relief companies

The situation is not so bad yet, but panic can make it worse. Debt relief companies promise help, but in the vast majority of cases they want to feed on your problems. They charge considerable commissions for their advice , and , moreover, People in Need also lit up the practices of these companies.

Tip: In case the situation is unbearable, avoid debt relief companies and inquire about the possibility of debt relief according to the Insolvency Act No. 182/2006 Coll. Tzv. personal bankruptcy is an extreme solution, but it allows a new start.

 

 

Do not repay the loan with a loan

credit problem

If you do not want to fully spin the debt spiral, avoid this “solution”. There is no solution. We will discuss this topic in more detail in the next episode.

Tip: Lenders who provide loans to already indebted people usually only benefit from their unfortunate situation. The borrowed money is therefore burdened with high interest.

Loan can be a welcome solution to acute financial problems, but as well the first step into a debt trap. If you suspect problems, solve them with a cool head and certainly not with additional loans or doubtful debt relief. It is in this way that the debt spiral most often spins.

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