Debt isn’t always a bad thing, but it can become problematic if not monitored or repaid in a timely manner. The trouble with debt is that many people don’t recognize the problem until it begins to put pressure on their financial situation. Knowing when debt is out of control and when help is needed is a key part of responsible money managing.
Time For An Intervention
The line between good debt and bad debt is very thin and can be varied depending on your financial situation. What is considered good debt for one person may be bad debt for another. It is important that you recognize when debts are becoming overwhelming before they force you into missed payments or delinquency. Ask yourself:
- Can I afford to pay more than the minimum payment? If so, have I been paying more?
- Paying at my current rate, will I be out of debt within 5 years?
- Can I repay my debts directly from my disposable income rather than from another borrowed source?
If you answered, “no” to any of these questions it may be time to take a closer look at your debt reduction strategy. First, understand that you have the right to repay your debts or negotiate with creditors on your own. Contacting a creditor to discuss payment options and arranging a more affordable plan is a great step towards debt resolution. If you find that creditors are unwilling to negotiate, consider hiring an debt negotiation lawyer to represent you in your negotiations.