Having trouble with debt? Here is what you need to do
As we sail through life, there are times when we go are faced with pressing situations. Situations where you have no possible way of escaping and there barely seems to be a solution to the problem. You are then left with no choice but to embrace the adversity. Being debt-laden is never a good place to be in. After all, a man in debt is so far a slave. According to data from the Department of Statics Singapore, the average debt of a Singaporean household is about S$57,637 per capita as of 31 Dec 2017, up roughly 5% from its level in 2016. Most of these debts result from home loans, motor loans, and credit card loans. Other categories of loans include personal loans, education loans, and other alternative loans.
When faced with debt, to some, it does seem like the end of the world. This is especially true if there is an exuberant amount of debt. But with proper planning, research, and a calm mind, it is possible to get past your debt. Read on to find out how to get out of debt.
Call your creditors
It might seem daunting to call your creditors at a time when you are already in debt but the best way to deal with the situation could be by calling them in advance. The moment you realise you won’t be able to pay up your dues, get in touch with your credit card company. They often have ways to help you lower your payment, which they can explain to you over the phone. Your creditors might be willing to reduce your interest rate for a short period of time. The only downside to this approach could be if for some reason your creditors are not willing to work with you. Even if they do decide to lower your interest rate, there’s a possibility they will close your account. Or, if they don’t think you can afford a lower monthly payment, they might refer you to a credit counseling agency.
Get an understanding of the laws pertaining to debt collection
Although there are no specific laws that regulate debt recovery, other statutes such as the Penal Code and Protection from Harassment Act may apply. For example, threats to use violence should be avoided. You may be charged for criminal intimidation if you threaten to injure the person, his property or even his reputation. You may also incur liability under the Protection from Harassment Act if you have caused harassment, alarm or distress.
Be prepared to deal with debt collectors
If you end up in debt, it would be useful to have a fair idea of what debt collectors in Singapore can do and cannot do. To begin with, let us focus on what the debt collectors can do. They can call up your family members or friends and ask about you. This means they can call up your near and dear ones and ask them about you and tell them about the money you owe them.
Another thing that debt collectors could do is mediate and negotiate loan repayment plans. Usually, debt collectors are viewed as gangsters or thugs but in reality things can be different. Debt collectors are still subject to the Protection from Harassment Act, which means they can go to jail for behaving unruly with you. Hence, most debt collectors these days are more like financial advisors. So, do look for possible negotiations to resolve your debt crisis.
It is interesting to note that one among the few things that debt collectors cannot do is gather in groups greater than 5. If the number exceeds 5, then it is considered to be an illegal assembly. They can even be jailed for meeting you in groups of more than 5 people. Secondly, debt collectors cannot impersonate government bodies. It is illegal to pose as the government agent or any other entity that is associated with the Singapore government.
Consider taking a personal loan
Taking another loan at a time when you are already drowning in debt can seem absurd. But at times, a personal loan can help you sail through the situation with relative ease, till you sort out your finances. This is especially effective if you know that you will be getting some funds in the future to even out the deficit in your personal balance sheet. If you can get a market leading rate, the APR may well be lower than you are paying with your current credit card. With some research, it is possible to get an interest rate below 8%. However, make sure you don’t borrow a huge sum of money as it could further drown you in debt.
We hope this has given you a fair idea as to how to get out debt. Do you know of other ways to deal with debt effectively? Let us know your thoughts in the comments section below.
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