Surely you came here because you need to know how to restructure a debt. Perhaps you are stressed: every time it is more difficult to pay or flat you can no longer and the interests make your debt grow like foam.
You know that the scenario may get worse, not only because your record will be affected, but also that you would ultimately be part of a trial and may seize part of your salary or lose some good if you left it as collateral.
Here we will explain two scenarios in which you can find yourself and what to do to get out of debt with the least number of scratches.
How to restructure a debt: preparing the ground
First of all you must be well informed about the conditions of your debt. Is it credit card debt? Is it a personal bank loan? Is your debt with a financial one? Are you up to date but can no longer pay the same amount? Are you already in default? Did you fall behind a few days, do you have weeks or months?
Having this information clear will give you a clearer picture of your situation, it can even help you determine a strategy for yourself without the need for this post.
Find out about your obligations and rights as a user as well as the terms of your credit agreement. Read the documentation, approach your institution to solve all your doubts before taking the next step: restructure your debt.
Scenario 1: you are up to date but the payments do not decrease your debt
This is the case of many credit card users. They have acquired too much debt and can only make the minimum payment, which helps to reduce the debt by 1.5% each month, at that rate it will take you years, if not decades to finish paying.
It also happens with personal loans from savings or financial banks whose interest rate is too high, even more than the bank’s.
Approach the bank voluntarily to request a new smaller payment plan without your debt growing.
If your bank does not allow you a new payment plan, even when you are up to date, then use option 2: change your institution.
If you pay only the minimum, your bank may not want to refinance your debt, as that could mean the loss of some interest as profit.
In case the above happens then change your institution. There are good options, such as Cratchit family, where you can apply for a loan to cancel your bank debt at a lower interest rate.
Before making this move make sure that the new credit is with a lower rate, so you will end faster: you can save up to 74% interest.
Scenario 2: You already have late payments on your current credits
If you are already late with your payments you have less chance of changing institutions to acquire a loan at a lower rate. As time goes by your opportunities decrease.
In the event that you have several weeks or months behind you can choose to approach the bank and request a restructuring of your debt to prevent it from growing and you can make smaller payments.
When you fall in default, banks tend to be a little more flexible, however your history will be stained until you settle your debt.
What not to do
Avoid credit repair companies. If you settle your debt with a discount through a repair company, it will always appear in your credit bureau history that you did not finish paying satisfactorily.
Do not refuse to pay. On repeated occasions we read this in the comments of the blog and it is not recommended for two reasons:
1 .- your history is stained;
2 .- You can be part of a trial where the resolution is that you garnish part of your salary.