With the help of one loan, you can close another and avoid late fees. The main thing is to stop there and pay the remaining debt on time. But not everyone can do this. Many people for several years can not get out of the debt hole. They hide it from their relatives. We tell you how to avoid such a situation and what to do if you are already in it.
What to consider when applying for a microloan
In a difficult financial situation, when there is no money and banks refuse to lend, you can apply for a microloan. The application is considered quickly, only a passport is needed for registration.
As soon as a person delays payments, the employees of the microfinance organisation begin to act. Their task is to return the money. A person is offered to pay part of the debt and in return is promised to forgive a certain amount. This is a very attractive offer.
Why you should not hide problems from your loved ones
Microloans can be addictive, this is what borrowers hide. There is no point in hiding loans from loved ones. There is a risk that one of the loans will not close and a person will get into a debt hole, from which all together will have to get out. First of all, you should think about your spouses, because the property may be affected. It will have to be sold in the worst case.
Problems with finances will not be able to hide for a long time. Collectors may call family members and ask them to provide information to the debtor. It is better to inform family members about the problems and try to solve them together.
Whether it is worth filing for bankruptcy
Experts say that bankruptcy is the only way to legally get rid of all debts when there is no money. If you are faced with such a problem, lawyers advise you to gather all relatives who can help. Together with them you can develop a plan of action. Everything depends on the amount of debt. If the debt can be closed by common efforts, then it is better to do it without bankruptcy.
How to avoid bankruptcy
If you are against bankruptcy and intend to deal with the situation yourself, experts advise you to consider several ways. The plan of action should be based on the total amount of debt and the presence of overdue debts.
If there is no debt or it is small, you can try to get a credit card from a bank and repay microloans. Now there are many products with a long grace period, during which you can find money to repay the debt.
If difficulties with repayment are observed for a long time, it is more reasonable to seek help from relatives or other microfinance organisations. Many organisations offer loans with no interest to new customers. You can also apply for a credit card because if you are already heavily indebted, the bank is likely to deny you conventional loans.
One alternative is credit holidays. If you don’t qualify for a credit holiday, try contacting a microfinance organisation and ask to restructure your debt. For example, reduce the payment by increasing the term. Contact them about debt restructuring, renegotiation or credit holidays.
If you realise that your income level will not recover and all options are not suitable for you, you can file bankruptcy. However, it is important to know that this is the most extreme measure. Bankruptcy will restrict your exit from the country, future loans and management activities.