| In many cases human nature is expressed as impulse | | | | debts one by one, in a timely and an orderly fashion. |
| before thought or in economic terms buy now, pay | | | | Acting quickly to inform your creditors makes it |
| later. The character of deferred payment is | | | | easier to negotiate adjustment of your payments |
| complicated by convenience of credit cards, loans | | | | that may in turn get reduced rates, waived fees / |
| and mortgages. In every case the economic theory is | | | | late charges, etc. where possible. |
| based on an assumption that you can afford to | | | | Another popular way to get back on track is to |
| make the payments of principal and interest on a | | | | consolidate your debts into one loan and pay it off |
| debt without change to your present ability to earn | | | | with lower monthly installments. There are many |
| an income. | | | | different ways to consolidate debt. The most |
| However, reality teaches us that theory is not the | | | | important step in this direction is to shop for the best |
| same as practice. Our circumstances are always | | | | terms and lowest interest rate. Terms are usually |
| changing. For example, unforeseen market changes | | | | connected to collateral or what assets you have to |
| like in sub-prime mortgages, job loss, injury, or illness | | | | secure your loan principal. You'd be surprised to |
| can change your ability to pay your debt in an instant. | | | | discover that terms of collateral vary even more |
| Other human characteristics that contributes to | | | | than interest! |
| unmanageable debt includes not knowing how to | | | | The best case scenario in a consolidation loan is to |
| budget, not sticking to a budget, emotional roller | | | | get enough money to cover all your debt at a rate |
| coaster type of binge spending, shopaholic behavior | | | | that you can afford to pay and terms flexible enough |
| needing to buy special offers, big discounts, or new | | | | for future adjustments in payment up or down. In |
| stuff like tech toys, clothes, games, etc. without | | | | some cases this may be as simple as getting a line of |
| regard for ability to pay. | | | | credit or extending one enough to get back on track. |
| In order to get out of debt fast you must recognize | | | | The worst case scenario is bankruptcy because you |
| the fact of planned and unplanned change. You must | | | | lose credit worthiness and it will take years for you |
| be able to adjust your spending up or down | | | | to rebuild your credit after discharge. The few |
| according to your circumstance. The sooner you can | | | | opportunities for credit after bankruptcy are |
| react to change and forecast adjustments, the easier | | | | undesirable because they tend to lock you into a |
| it becomes to manage and ultimately eliminate your | | | | debt payment rut that can multiply the years and |
| debt. | | | | increase the cost to become debt free. |
| Short term adjustments may include paying off your | | | | |