Don't drown yourself with payments. Here are some alternatives that can "put out the fire" generated by uncontrolled debts. Without a doubt, uncontrolled debts derived from lack of planning and administration of our expenses, hence only 20% of adults in Mexico keep a record of them. This shows that making a budget is not a common practice among the population. However, it's an exercise we must practice daily to have greater control of our expenses, know our credit capacity, and, based on it, think of getting in debt. Failing to do so can get us into serious trouble and cause an uncontrolled debt spiral. Therefore, according to Condusef these are some alternatives that can help you "put out the fire".
a) Request a fixed payment plan.
Negotiate a term with the financial institution (generally, from six to sixty months) where you agree to pay a fixed amount to reduce the debt. The advantage of this plan is that there will not be a variable interest rate, so you will know how much you have to pay each month on a fixed basis.
b) Consolidate your debts
If you have debts on different credit cards, with one or even several financial institutions, one option is to consolidate all debts on a single card. Some advantages are you will no longer pay interest, commissions, or annuities on the other credit cards. You will only have to focus on a single debt, making it easier to control it. For it to be beneficial, the consolidation must be on the card with the best conditions (lower Total Annual Cost and interest rate). Ask the credit institution if you are subject to this benefit and under what circumstances.
c) Restructure your debt
The financial institution can make some reductions or waive some of the debt (also known as "quitas"). It seems to be the most convenient option. However, you have to know that it will have negative consequences for your credit history and your ability to access new financing.
PAPER SPEAKS
Whenever you come to a negotiation with a financial institution, you must have an agreement signed by both parties. Generally, a restructuring means the conditions will change. The credit you had before will be replaced, so you must have the legal document signed by both parties to support the agreements you have reached with the financial institution.
BEWARE OF CREDIT REPAIRS
Please take into account that they are not going to solve your problem, what they are going to do is negotiate for you, and give you legal and financial advice. You will be charged for these services. Never give them money upfront, as you risk not having the problem fixed. When they tell you that in exchange for a payment, they will delete your history from the Credit Bureau, stay away, that is false; they cannot do it!
RECOMMENDATIONS
1- Prepare and follow a budget
2- Write down all your monthly income, whether it is your salary, sales income, vouchers, incentives, commissions, in short, what you receive each month.
3- Describe your expenses, first the fixed ones such as electricity, rent, telephone, food, transportation, etc., and then write down how much you are going to save each month.
4- What you have is your ability to pay to acquire a loan, so you will know if you can get into debt or not.
Traducción: Valentina K. Yanes