How to pay off debts correctly

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

It often happens that when taking money on credit or against property, no one thinks how he will return this amount. Situations in life are different and it is impossible to predict something. It happens that the time has come to return the obligations assumed, but the required amount of money is not available and there is nowhere to re-borrow. The amount of debt starts to grow. And it becomes unclear how to pay off debts.

Assessing the situation

All cases are unique in their own way and the amount of debt can be completely different. The first step is to assess your financial situation. To begin with, in order to be able to pay off debts, you will need to determine the number of banknotes that you can give at a certain time and without harming yourself. It is best when this amount is several times greater than the amount of the contribution. Thanks to this, the interest on the loan will be significantly lower, and the time to repay the debt will be significantly reduced.

Types of debts

All types of debt are conditionally divided into the following:

• Early payments.
• Those that are repaid according to the schedule.
• Payments for which, due to this or thatthe causes of debts are problematic.
• Those that are not considered possible to repay - hopeless.

For yourself, you will need to clearly understand which group of debtors to relate to. Knowing this for sure, it will not be difficult to build the right strategy for getting out of this situation. The question of how to pay off debts becomes relevant when incomes plummet. The reasons are different: non-payment of wages, the birth of a baby, illness or loss of working capacity. It is necessary to clearly assess the situation in order to understand how long or always (in the case of loss of efficiency) this crisis will continue. This will help you avoid getting into a situation where you have to ask someone: help pay off your debts.

Pay Plans

How to properly pay off debts on loans? If there are funds and there is a desire to get rid of the debt as quickly as possible, then the first thing to do is to have a conversation with the creditor and draw up an additional agreement. It, without fail, must indicate the amounts of payments and commissions, as well as all possible ways in which payment will be made. After the final settlement with the debt obligations, the bank or creditor must give a receipt for the payment of the entire amount, and indicate that it is closed within the agreed period.

When it became clear that you can pay off the debt on the same date, you need to do it at least 1 day earlier. It does not hurt to ask bank employees about whether it went through on timepayment. Compliance with such simple rules will never be able to drive the debtor under pen alties and interest. It is important to understand that the creditor is interested in his own benefit, and he will not have a desire to report on his own whether the payment went through. The main thing when borrowing is to independently control the flow of funds to the accounts. This will remove the question of how to pay off debts.

How to pay off debts if there are temporary difficulties

It is difficult, being not in a very good financial situation, to quickly close the loan. How to quickly pay off debts? With a small and unstable income, it is not easy to pay credit obligations on time. In order to find the optimal solution in such a situation, you need to start planning your budget. It is necessary to come up with a table and enter all monthly income and expenses into it. You need to start by writing down all the amounts, expenses and income, but this is in the first month. Upon completion, you need to carefully analyze all financial resources, exclude something from the expenditure side, cut something.

Then, for the next month, you need to plan the budget so that there is a separate column in which the amount of the loan to be repaid will be entered. It must be real so that it does not turn out that a person will again find himself in a difficult financial situation.

Notify lender

In difficult situations, it will be correct to notify your creditor of the difficulties that have arisen for any reason. It must be remembered thatany bank is fully interested in returning its funds and, if possible, with minimal losses. It is unlikely that in such a situation the bank will impose a fine on the debtor. It is necessary to try to agree with his representative on the possibility of extending the terms of the loan or on refinancing. It is important that it is clear that a person is fully interested in this, but for some reason got into a difficult financial situation. It is necessary to do this as early as possible, and not wait until the lender asks about the reasons for the delay in payments.

Peaceful ways to resolve issues with the bank

There are several proven methods of how to pay off debts on loans, peacefully resolving all issues with the bank:

• Temporary deferral of payments.
• Several loans are combined into one.
• Debt is completely written off.

The first way to pay off debts is that the bank extends the time to pay off credit debt. The monthly payment becomes smaller, but due to the fact that the borrower constantly pays interest, as well as the fact that the country has constant inflation, the total loan amount that the debtor repays increases.

The second method involves the fact that the borrower, who has accumulated several debt obligations, cannot cope with payments and the bank combines them into one loan. This method can only be used if the interest rate is low, otherwise it is very disadvantageous for the debtor.

Third methodis more of an exception to the rule. And the bank uses it only in rare cases. He can completely write off the debt if the balance of the outstanding loan is too small or the borrower has died and has no heirs.

Cases when a wife pays off her husband's debts

Those who are bound by marriage have not only joint property, but also joint debt obligations. It is not uncommon that married people did not settle such important issues as common property during their life together, and during a divorce they also did not bother to do this, as a result they will have the same status as during marriage.

Does an ex-wife have to fulfill debt obligations after a divorce? There are some nuances here that depend on how the loan was issued:

• The ex-husband made a loan agreement before he got married, but the validity of this document covers the period when they were married, as well as the time of its termination.
• At the time of the loan, the second spouse acted as a guarantor or co-borrower.
• The ex-husband drew up a loan agreement, but did not notify his wife about it, but the funds received were spent on joint family needs.
• The fact that the husband took out a loan and spent money for his own needs, the wife found out after the divorce.

All these listed circumstances have a different impact on the ex-husband and wife. Especially in a situation where one of the former spouses finds himself in such a position that he cannot repay the loan,or abandon it entirely.

In the event that the loan agreement was drawn up before marriage, on a general basis, all obligations are borne by the one who executed it. But there are different situations, and only the court can sort them out.