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The extrajudicial resolution of the debt allows to reach the regulation and the definition of the debts without the need to resort to the intervention of a judge. When debts are due and cannot be honored, creditors have the possibility and the right to apply to the judicial authority to claim their claims. However, before proceeding with the possible activation of an executive procedure and the consequent attachment, it is possible for the creditor and the debtor to sometimes find a solution that can be advantageous and inexpensive for both and that leads to an amicable resolution of the entire dispute.

There are basically two solutions.

Debt exposure

The first is the possibility of returning from the debt exposure by means of a balance and excerpt, or a settlement proposal through which a percentage reduction of the entire debt is obtained. Debtor and creditor agree to pay a “balance” sum, that is, the debtor agrees to pay a lesser amount than the total residual debt. Transaction then defined as “excerpt” since the creditor, once the agreed payment has been obtained, will charge the residual amount of the debt not honored as “loss”, simultaneously declaring that it no longer has any claim against the debtor.

 

Preparation of debt repayment plans

The second way forward is the preparation of debt repayment plans that take into account the debtor’s current contribution capacity. We are talking about repayment plans in installments or in any case deferred, in which two are the main factors to be taken into consideration: the current sustainability of the installment and the time to repay the debt. The aim is in fact to make the debt burden to be paid to the creditor institution sustainable, facilitating the debtor’s payment of his debt and placing it again in the “economic conditions” suitable to satisfy creditors completely and pay off the debt position.

However, each situation is different and it is not possible to establish precise rules as in this type of agreement a lot also depends on the debtor’s accessibility. The purpose of the negotiations with creditors is however to find new agreements on the extinction and / or redefinition of the outstanding debts, an aim that must be certain, clear and aimed at finding a truly achievable solution.

The debt spiral draws more and more people. Easy availability of loans and credits combined with making financial decisions under the influence of emotions and impulse is a truly explosive apartment. A mixture that can result in huge debts that are difficult to tame.

What is a debt spiral?

Simply put, the spiral of debts is a huge disproportion between the amount of our inflows and the amount of financial liabilities that we have to cover (especially loans).

By falling into a spiral of debt, we are not able to pay our liabilities. Their amounts exceed our financial capabilities. Feeling that the situation does not look good, many people decide to take out more loans and credits to repay existing debt.

Unfortunately, in this way, instead of improving, borrowers usually make their situation worse.

Causes of the debt spiral

According to the 2015 Social Diagnosis, the percentage of households in Poland with loans and borrowings in 2015 was 34%, which gives about 4.6 million indebted households.

The reason for Poles’ huge debt is not only the easy availability of credit products and loans, but also … lack of imagination and making poorly thought-out financial decisions.

How to avoid a spiral of debt

To avoid a spiral of debt, you should only take out loans that we can afford. A simple analysis, based on comparing revenues and expenses will allow you to assess whether you will be able to repay the entire loan amount in a timely manner.

The key to success here is also a thorough analysis of the provisions of the contract with the lender. By signing the contract yourself, you should be absolutely sure that all records of the document are clear and understandable to you. Also make sure that you are aware of the consequences of late repayment and that the lender will allow you to return the loan early and withdraw from the contract.

Before you get a loan, think about whether its purpose is really worth borrowing money. Can a luxury vacation not wait, and a newer, larger car is certainly necessary?

What if I fell into a debt spiral?

If you’ve fallen into a spiral of debt, first of all, don’t borrow any more.

Consider in what order you will pay back the loans you currently have and what amount you can realistically spend on repaying your debt.

Remember to use only factual data when making calculations. If you think you will get a bonus in 2 months, do not include it in the statement until the money appears on your account.

Reducing expenses

If you want to speed up your return, you will also need to reduce your expenses.

To start spending restrictions, start to control how much money you spend and where you spend it most.

When going to the supermarket, be sure to take a card with a shopping list with you and minimize spontaneous expenses.

Do not avoid talking to the debt collector and bailiff

If, as a result of debt, your case went to an external debt collection company or bailiff, do not avoid contact with them. The fact that you will not receive calls and correspondence will certainly not improve your situation. In most cases, it will make it worse.

Some of the reasons people choose to sign up for signature loans include financial insecurity, fear of losing their job, credit problems, and needing urgent cash. Although these reasons are valid, most people don’t make the effort to ensure that their signature is secure when it comes to a loan.

In most cases, signature loans are short-term loans that must be paid off in one payment. It’s not uncommon for some lenders to require a minimum number of signatures on a particular loan before extending the credit to the borrower. That practice is designed to prevent people from intentionally defrauding a lender.

 

Borrower’s signature to be required before the loan can be paid off

Signatures are most often found on a loan application or documentation. The original form for a credit report reports are usually signed by the lenders.

Since signature loans are used so frequently, there is a significant risk that a consumer will become delinquent on their repayments. In most cases, lenders want to see a post-dated check to verify that the loan was actually paid in full. To do this, the lender will require that a signature be supplied in order to collect the funds, which usually happens at the time of application.

Because signature loans are short-term, there is a relatively high interest rate associated with them. Because of this, many people are willing to put their signature on a loan without checking the conditions of the loan. Unfortunately, this could cost them in the long run.

 

Signature loans are often short-term and therefore not very long term

While many individuals don’t think about it, signature loans are usually subject to a higher interest rate than a secured loan. This is primarily due to the fact that the signature is based on the borrower’s signature. Lenders generally have higher standards for whether or not the signature will be sufficient. If the signature isn’t good enough, the loan might be denied. Because of this, the interest rates are fairly high compared to other types of loans.

Because signature loans are short-term, the duration of repayment varies widely. Due to the short period of time, this type of loan is usually very expensive. For those who miss a few payments, the cost of the missed payments can quickly add up to the amount due on the loan.

Due to the high rate of interest and potential for financial loss, it’s important to research any signature loans carefully. Be sure to read the terms and conditions of the agreement that you agree to in order to make sure that the agreement is valid. Check with a debt consolidation service to make sure that they are certified and well-respected.

 

An exception of payday loans

Signature loans are not approved. Because signature loans are short-term, there is usually no security required from the borrower in the loan. However, some lenders will require the borrower to provide a letter of guarantee that verifies that the borrower’s credit rating is current.

There are many reputable lenders out there that offer signature loans. You just need to find one that is right for you. Take some time to really look at the requirements that lenders expect before approving a signature loan.

In general, signature loans are not ideal for people who cannot get a credit card. But, because there is a very small interest rate, they are also a good way to lower monthly bills. If you have bad credit, then signature loans might be your best option for getting out of debt.

The amount of Suryadi’s debt bills is equivalent to a debt ratio of 47%. This means that the debt has exceeded the ideal portion of 30% of a month’s income. If calculated, Suryadi’s debt threshold in accordance with his salary of USD.4 million is USD1.2 million.

Such conditions are of course very disturbing Suryadi’s finances. No wonder if he had to work hard again looking for additional income as an online motorcycle taxi. Not to mention paying rent for rent, food and daily transportation costs, buying milk and children’s school fees, and others.

Already Have Lots of Debt, The Solution?

One debt has not been completed but has another debt. This is the term to dig holes continuously. To pay debts there or not, later. The important thing is complete household furniture, good, new too. Not losing to the next-door neighbor.

According to the Financial Planner from the Education Planning Partner (MRE), if the debt has exceeded the 30% limit of income per month, then steps to manage finances so that it is not chaotic, include:

1. Cut spending on roads

Re-combing the shopping budget for a month. Cut spending that is not too important or can still be postponed. The first time you need to do is reduce leisure shopping (pleasure).

“If the salary must be used to pay more debt, press the budget fun, like traveling, hanging out, watching movies in theaters,” suggested Andy when contacted by Fine Bank, recently.

2. Bring lunch

Another way to save expenses is to cook and bring lunch to the office. It’s more economical than buying at a food stall. Especially for those who have a hobby snack at a restaurant every lunch. If you cook rice and side dishes at home, you can eat three meals a day.

3. Look for additional income

If you have reviewed the finances and there are no more expenses that can be pressed budget, you must work side, looking for additional income. Of course to be able to pay credit bills and meet basic daily needs.

Without additional money, you will stagger. If the liquidity problem is interrupted, in the end, you dig a new hole, to close the old hole.

Dig a Hole Continue, Wise?

It’s not impossible to own it. But you must be able to measure your financial capabilities. Do not just because there is a 0% installment credit card promo or mild DP, immediately tempted. Without realizing it, you have accumulated debt. When checking the finances, the peg is bigger than the pole.

Andy suggested, for those of you who already have debt obligations, then want to owe more, you should consider the following things:

1. Check the debt ratio

Andy said, if the old debt hasn’t finished yet, but want to take new debt better before that, first calculate the percentage of debt that you have to pay to date. Remember, a debt safe limit of up to 30% of income per month. More than that portion, worry that you are too consumptive, and the salary will run out just to pay debt installments only. While the main needs are neglected.

“Suppose you have an obligation and want to add more debt, first make sure the total amount of the old debt installments and new debt is not more than 30% of income. If it is more than this number, and the need (taking new debt to buy something) can be postponed and not urgent, you should not need to owe it first, “he explained.

2. Think again it’s important not to owe to buy an item

Furthermore, Andy admitted, it must be able to measure whether the items you want to buy with debt are important or not. Moreover, because it was only part of it, it could be said to be cool, or just prestige. Your fall is consumptive. Using debt for something that is not productive.

“See actually important or the necessity of the goods owned. If it’s only luxurious debt, personal pleasure, not urgent, it becomes a problem. This means you are consumptive. Better not need debt, “he concluded.

How can you pay off your debt?

Debt using a credit card or applying for a loan, such as Unsecured Loans, Multipurpose Loans is actually fine. Provided for something productive, for example buying a house, motorized vehicle to work, opening a business, or buying the necessary needs. Not just follow the desire that is consumptive. Be a smart society that is wise in debt.

 

Those who can no longer meet their payment obligations are in a spiral of debt and have to expect the bailiff to stand in the door to collect all the beautiful things that were bought on credit and not paid for.

Anyone who suddenly loses his job or is left by his partner will run out of money and will ultimately no longer be able to service current loans. Experts assume that around three million private households in Germany are over-indebted. One in ten adults is so deep in debt that they can no longer leave the vicious circle without outside help.

What is over-indebtedness?

One speaks of over-indebtedness when a family or a person has no more savings and the monthly income is insufficient to cover all expenses. Many households in Germany already have problems with debts that are less than 10,000 USD and young people who still live in their parents’ homes already have a problem with 1,000 USD in cell phone debt. Young people, in particular, are particularly at risk because if they take on new debts to settle old debts, they can drag themselves deeper and deeper into debt over the years.

Who can be affected?

They are men and women with and without a doctorate, with and without training. Most of the over-indebted are between 30 and 50 years old. At this age, a family is started, loans are taken out, and if something unforeseen happens, such as the loss of a job or pregnancy, in extreme cases this can mean that the loans can no longer be serviced.

The income of the people who ultimately have to file for private bankruptcy is usually very tight. Many of those affected are Social Welfare recipients who have practically no financial scope. Those who have credit obligations from better times can no longer meet them at the latest when they receive Social Welfare.

How does over-indebtedness come about?

For German consumers, separation from the partner and divorce are the most common reasons, but unemployment, a serious accident, or a long illness can ultimately result in obligations no longer being fulfilled. Even a harmless guarantee obligation can lead to ruin.

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Those who cannot resist the temptations of consumption, who always respond to advertising in the way that the advertising industry expects, and who regularly lives beyond their means because they want to represent a status that does not correspond to their true income with the possession of material goods more at risk that the debt trap will eventually snap shut.

Because it has become legitimate in today’s society to consume at a pump, the boundaries are almost blurred. True to the motto “buy today, pay later”, many consumers are tempted to buy things that they neither need nor can afford. This opens the door to debt.

Where can you get help

Anyone who realizes that they have financially overstretched should immediately get professional help from a debt counseling service. Private bankruptcy is not always the only way out. In the early stages of debt, there are still opportunities to reach an out-of-court settlement with creditors, thus avoiding the worst.

This help is offered free of charge by debt counseling services.

Payday Loan Debt Consolidation – How to Consolidate and Eliminate Debt

Payday loan debt consolidation is one of the best things that can happen to you when you are in financial distress. It may be only for a short period of time, but you can get help paying off all your loans with payday loan debt consolidation.

A payday loan debt consolidation is a method of negotiating with your creditors and getting a reduced payment. This will usually come at the end of the month when your next paycheck arrives.

The reason that this is called short term is that the creditor can be flexible with you when it comes to how much money is required from you. Of course they are concerned that if you miss the payment, they will lose your business.

If you are in need of short term help with your financial problems, then payday loan debt consolidation is for you. You just have to know what you want out of the process and you will be able to get it.

Make sure that the company will provide cash advance loan

When looking for payday loan debt consolidation, it is important to look for a company that can provide a budget. This will help you make sure that you are able to pay off all your debt and still have some left over to pay for the rest of your bills.

Make sure that you look for a company that is able to provide cash advance loan debt consolidation as this is a good way to go. When you start the process, make sure that you ask about the fees that are involved in this program.

You may find that there are some that will waive the fees that you will have to pay if you do not fall behind on your payments and even if you have a poor credit score. This is a good way to ensure that you are not in too much debt.

A bad credit score can be made up for with a little credit card debt. There are a lot of people that are struggling with payday loan debt consolidation who have a poor credit score.

There are even companies that specialize in helping people that have a bad credit score. This is a good way to keep you from falling into the same situation that you were in before and make sure that you are paying off your payday loan debt consolidation in a timely manner.

Steps to be taken to take payday loan debt consolidation

Once you find the right company to work with, the process can be a bit easier than you might think. There are some steps that need to be taken that can help you get through the entire process and ensure that you get your payday loan debt consolidation.

You will need to take care of all of the correspondence with the company, making sure that you are able to pay off all of your bills and that you are current on them. Make sure that you call all of your creditors to see if they have any other options.

As long as you use this type of process when it comes to payday loan debt consolidation, then you will be able to stay out of debt. Of course, the last thing that you want to do is fall back into the same situation that you were in before you started the process.