No one plans to get into debt. Yet, there are many who get sucked into it on account of uncontrolled spending, unexpected expenditures such as those caused by illness, or a sudden loss of income on account of a loss of job. The only way to get out of such situations is good debt management.
You need to take a long hard look at what comes into your pocket and what goes out of it. For this, you need to list your income from all sources. Then make another list of expenses. See what is essential, and what can be dispensed with.
Once you have the facts in front of you, you will be able to put your situation in perspective and decide on a course of action. You can decide on realistic budgeting, credit counseling from a reputable organization, debt consolidation, or bankruptcy. Your level of debt, the discipline you are capable of, and your income prospects will help you decide the best option.
The first thing to do, of course, is to explain your situation to your creditors, and work out a mutually acceptable repayment schedule. This should be done as early as possible because every creditor is favorably disposed towards an individual who wants to return the loan. The trouble begins when they turn you over to a debt collector; the debt collectors do not negotiate, they just collect and this can be a very unpleasant experience.
Some lenders agree to reduce or suspend your payments for a short period of time, while others help reduce your monthly debt by increasing the tenure of the loan.
If you feel that you need advice on the negotiations then you should seek the help of a credit counseling company. For a fee, these companies chalk out an ideal, consolidated repayment plan for you taking into account your set of circumstances. They then approach your creditors and renegotiate interest rates and payment periods so that you get a payment schedule that is as near ideal as possible.
You can always take a bigger loan to pay back the several smaller loans that you have; but it is a vicious cycle. The best way to pay off your debts is to tighten your belt. Nothing works like discipline. What’s more you don’t have to pay anyone for being disciplined.