Last Updated on December 19, 2022 by Patrick Mahinge
Getting our lives sorted out by incurring debts here and there is all too fine, until the time comes and you realize that you actually are not in a position to finance all you’re the debts. The revelation that you are almost bankrupt, that your property could be auctioned at any time hits us hard, and in the frenzy of the moment we rush to do some foolish things that we rationally would not have done.
Before you decide on the course of action after you find yourself stuck in debt, here are a few things you may want to never do.
1. Giving Creditors your Financial Information
You may be tempted to quell a persistent creditor by revealing to them your true financial status, trying to buy yourself some sympathy votes. What this in reverse does is give the creditor even more reason to go for your neck if he feels threatened that you may not be able to settle your debts, after all, no body loves to incur bad debts in the line of business.
2. Borrowing From Friends and Family to Finance the Debt
Desperate times call for desperate measures, right?
Don’t fall into the temptation to borrow money from friends and relatives to finance your debt if you do not have a definitive plan of how you are going to repay them. Borrowing only builds up your debts and may even lead to squabbles within the family.
3. Taking another loan to finance your ongoing loan
Taking another, most probably high-interest loan, to finance your stalling debt is only piling coal on an already steamy situation. Better find other ways of settling your current creditor before you start accruing anymore debts on your credit card.
4. Spending Recklessly
When in debt, try to curtail on your shopping sprees, this may sound obvious but you will be surprised at how many people actually continue spending recklessly after they land in debt. The main reasoning behind this irrational spending is always something like “What the # I am already in debt. A few more dollars won’t hurt, will they?”
You may even want to cut on the spending of some utilities in order to fully settle your debts. Don’t be tempted into despair, which could actually result to more reckless spending on your credit cards.