How to deal with a large debt

The habit of living above our means is extremely dangerous. It is easy to spend if we pull the credit card, but we are not 100% aware that this money belongs to the bank and sooner or later we will have to pay it. Credit cards are especially sensitive because they can give access to a large amount that can be used at any time, but how to deal with a large debt that we have acquired almost without realizing it. Here we analyze it. has more notes

What to do when you are in great debt

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The maximum debt of Spanish households was reflected in 2010 when the debt of the families represented 85% of GDP. This debt has fallen today to 59% of GDP, and stands at the European average. This debt not only refers to the amounts lent by the banks as a card but also to mortgage loans, which adds to what families have to repay on a monthly basis. One expense after another that makes us be in debt. In a situation of excessive debt there are several ways to respond :

1. Ignore payments, the riskiest way

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There are people who face problems ignoring them and in the same way respond when they see themselves in a spiral of debt. It seems easy to ignore calls claiming payments and appear inaccessible, but before choosing this route, it should be noted that refusing to pay a debt is a civil violation and carries criminal responsibility . Refusal to pay may result in a lawsuit and, depending on what has been signed in the credit card or mortgage loan agreement, a forced refund of debts with available funds or assets will be responded.

Among the penalties you can give a garnishment of the regular income from which you owe money. Another penalty that can be given is a fine. And finally it must be clear that this situation is detrimental to the credit history of the user, which can be included in a list of delinquents and find that tomorrow they can stop offering even basic services such as a telephone line for being in this situation.

2. Restructure the debt

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A peaceful solution to the problems is debt restructuring. The lender is in all cases interested in collecting the borrowed funds and, therefore, it is not profitable for him to take relations with the client to extreme cases involving judgments. In most cases, lenders are ready to offer debt restructuring options that may involve:

  • Reduce monthly payments . This will make the fees smaller but they will be paid for longer.
  • Change the structure of the payment plan . A monthly payment can be replaced by a single payment of 2-3 months. The payment date can also be changed.

The option chosen will depend largely on the circumstances and possibilities of the client. To carry out the debt restructuring, it is sufficient to contact the bank with which you have the debt. Simply tell the manager why you cannot, for example, from next month, meet your debt obligations. It is better to contact in advance, before the appearance of real delays. This will be a point in your favor.

Other options

Other possible ways before large debts or several debts would be the reunification of debts or deferment of payment.

  • Reunification is about asking for a new loan of money that immediately covers the existing debt.
  • The postponement is simply ‘buy time’, that is, some amount is paid for not paying the debt in the agreed time, if not paying it later.