We are all going through a difficult period both for access to credit and for personal credit management. Economic instability has put pressure on the economy, causing it to register completely unfavorable and penalizing indicators of economic and social growth.
Many families find it difficult to meet all their commitments for the first time, namely credit commitments, regardless of the type of commitments. The truth is that when such a moment arises in their financial lives the world seems to collapse from moment to moment making the burden of non-compliance heavy and difficult the possibility of resolution.
It is also true that the banks do not intend to have their customers defaulted, nor do they intend to stop receiving the capital they have lent, plus the interest and charges contractually anticipated and agreed upon. If you are in a situation of potential default and / or if you find that the money you are getting on a monthly basis is not enough to fulfill all your responsibilities then the best route and decision is to anticipate default or take action to combat it .
Know All Your Monthly Charges
Your monthly challenge is to meet all your monthly financial obligations but also your personal and family obligations. It is therefore necessary to find a balance between these two financial poles.
The best way is to know exactly where your money goes and what the reasons for it. Begin your journey by collecting all the financial and non-financial documents that report a full month of your family budget and check each expense and charge you have.
Organize your charges by categories and by type of expense, such as fixed, variable and extraordinary expenses related to food, credit, housing, automobiles, among others. The objective is to understand the true extent of their responsibilities and to verify the obligation to have them. Evaluate if you can not reduce and earn financial margin for the future.
Know Your Monthly Income
It’s worthless to know all about your burdens if you do not know clearly what your sources of income are. Where does your money come from and what is its regularity? For example, if you only get the monthly salary will this be enough? Will it have this stability in the medium term? Is there a risk of not receiving it?
An assessment and forecast of your sources of income will allow you to plan your financial future and provide you with tools to counter potential credit default risks.
It will also allow you to create a credit structure that you can present to banks to negotiate your credit situation. For example, if your car loan consumes you 40% of your monthly income and there is a risk of not fulfilling all future liabilities, presenting such a scenario to the bank asking for a solution that allows you to comply can be the best negotiation tool you have.
Analyze Your Net Situation
How much money do you have every month? Is there an opportunity to increase such surplus? How do you plan to apply that leftover?
These are questions you should ask, especially if you are in a position of potential over-indebtedness, ie if your income is not enough to cover all your responsibilities.
Awaken your life and aim to increase your net worth. The perfect knowledge of its liquidity situation and the causes that allowed it not to be positive is an indicator of the weight to negotiate eventual contractual changes to its credits.
What can a bank say to a customer with a negative net worth duly justified and optimized, but to renegotiate the burden of credit or wait for default?
There is no half-measure, or the bank accepts renegotiation and keeps the credit compliant or starts to default, and rises to bear unnecessary costs in court.
Contact All Your Creditors
With the homework done it is time to contact your creditors and seek to renegotiate your credit. Do not hide any element. Be clear of the need to renegotiate and transparent in the will to maintain existing levels of compliance or to regularize the default you have.
Ask for help
There are a number of ways you can help reduce your burden of credit on your monthly budget. A well-known form is the credit consolidation that allows everyone who has financial difficulties in grouping their credits with a view to reducing the monthly weight of credits.
An alert that we never tire of repeating. If you ask for help do not pay for the diagnosis and do not believe in the pre-approval of online processes. For example, our financial diagnosis queries are completely free and are enough to know the real extent of the problems.