Make sure that your life can function normally during the transition from having extreme debt to living debt free.
Prepare a budget to determine the amount of your income that you reasonably need for everyday living. These monies should be retained from your wages for your family and not used as part of the process for resolving your debt problems.
Discuss with your family and decide on outcomes you want to achieve within the next five years. For example, you may want to save for:
- A new fridge, washing machine etc
- A new lounge
- A holiday
- To save money in your bank account for financial security
You need something to look forward to.
Explore, consider and understand all available options to remove your severe debt.
You should seek knowledge from advisors. You should not allow advisors to tell you what to do. The advisor does not know and understand you. Do not let an advisor tell you what to do as whatever course of action is implemented, you have to live with it, not the advisor. Only you understand how your life works and you need to be the one who decides what option is best for you.
Keep asking questions and get opinions from others (including other advisors) to enable you to decide on the best way for you to extract yourself from unsustainable debt.
Available options under the Bankruptcy Act to remove your extreme debt problems include:
- Personal Insolvency Agreement
- Debt Agreement