A debtor is a person who has obligation of paying a debt. An indication that he is not yet a free person until he is able to settle his debt. And for whatever reasons debt is incurred, the fact remains that it must be paid. This is the more reason why debtors always looking for ways to settle their debts. All financial promises,at any rate, must be redeemed. Therefore when a debt is settled, it immediately provides the debtor another chance to access more credit, obtain additional loan or hire equipment for business. In any case what matters is the ability of a debtor to settle his creditor as at when due and in an agreed manner. It is not out of place to obtain loan and spend on the reasons for which it is obtained, but what is important is to ensure that the money is invested on a good and profitable venture. Money borrowed to cater for immediate or pressing need is not a crime, but clearly this is not a business that can pay back. It means that the debtor will have to source for money to pay the amount borrowed. If he must not approach bank for money, then traditional method of raising money to settle debt is a good alternative.
In efforts to pay back debt, lots of things usually come to mind, one of which is how to go about it. Mostly if the money so borrowed is not in any way invested such that profit from it can pay the debt, then the debtor needs to look else where. The following are some of the available options and steps that can be taken towards paying debt:
Reduce Expenses
All expenses need to be slashed except those that have drect bearing on the upkeep of the household, Items such as inevitable electric bill, water rate, medical bill,children school fees and other essential expenses. Obviously some expenses are not necessary but are made because of the availability of money. There should be a clarity between items you need and those that you want, some items are purchased not because they are budgeted for but because there is excess in the purse. Items that fall within this category can be ignored at the moment. So, by the time the expenses is carefully prioritized and the essential items are purchased any unspent money is regarded as surplus and this can be made available for debt settlement. However cutting down expenses in order to raise money to settle debt is a good option, but often this method imposes hardship and has adverse effect on the regular household expenses. No external assistance.
Increase Saving
The idea of increase saving is simple to review the present saving up ward ,for instance if 20 percent of your salary is usually set aside for saving, now because of the debt it has to be increased to 30 percent. This gives you the opportunity to discipline yourself to manage the available resources and to save the rest towards payment of debt. It therefore implies that any additional money coming to you would be treated the same way. The effect of this idea is that there would not be surplus at home, some relevant but not essential items would not be considered.
Increase sources of revenue
To increase sources of revenue is simple to have multiple streams of income with a view to augment the existing cash flow. This involves extra efforts depending on the nature of work, some people engage in more than one work. Due to one problem or the other, people engage in more than one work. Through this, much money can be raised to achieve their desire. At times people go out of their way to do labourer work, when is a pressing need for that. Of course it is not quite easy to work for more than necessary hours, but because of your obligation to settle debt. Going by this concept you will still have much money after paying debt. And no hardship is inflicted on the normal household expense.
Some financial problems that required immediate attention can be solved with little efforts. On many occasions creditor(s) will legitimately be on your neck, for settlement of your debt. Often, you see no one coming to rescue you. But it is certain that you must pay what you owe.
To sell excess properties
Another method gives you opportunity to look inward and fraction out solution from within. With this concept you do not need any external assistance. All it needed is to run through the inventory of all your properties.Check it one by one with keen observation on the quantity. Point out all the items that are more than one, as in quantity. For instance if the exercise revealed that you have 2No of laptop; 2No of washing machines; 2No of cars. With this information one could notice that any item that is more than one automatically creates excess. Then all the excess can carefully be arranged separately. Do the real valuation of the items and arrange to make outright sales. Considerable you have been able to raise money through this means. Notwithstanding, it all depends on how much is standing in your debt profile.
The only drawback in this method is that those items we categorized as excess will no longer be there. But whatever is the consequences ensure that you create awareness or possible have a first hand discussion with your spourse. Ensure that the action does not create hardship whatsoever for the household.
With the proceeds from the sales, debt can be settled, depending on the amount. The beauty of it is that you have been able to pay your debt without any form of external assistance.
To rent out extra properties
Contrary to the outright sales of excess properties, you might need to consider borrowing your extra properties to another person. Most at time, some items you probably do not need at the moment can meet a pressing need of another person. For example, where you have 2No of cars, it may be wise to give one out for commercial purposes.on the understanding that he pays for using the car. I have seen a situation where a young man had employment issue. While looking for opportunity, he thought of driving a Taxi.Becoming a taxi driver is a good option in the absence of none. He observed that his neighbour had two cars. He approached him and explained his unemployment condition. At the end the man agreed that he should use his extra car as taxi. Not without condition. He agreed to pay certain amount weekly.
If one has a parcel of land, he can always ask somebody to hire it, through Properties Agent. Since he does not have the need for its use at the moment , it is a good option. With this pressing need can be meant, while you still have the property.
Trade in asset for a cheaper one
In case you have expensive car or any other valuable item, such item can be sold to buy a cheaper car. Usually when you trade in expensive car to obtain smaller one, the variance will be given to you. With this method you have simple carried out a substitution. If for instance you are owing $2000 and you trade in your car for $3500 you are left with $1500. All it is required of you is to settle your debt. The method avails you the advantage of eating your cake and still have it.
My name is Muyideen Elemoro. I am a Nigerian from Ibeju -Lekki Local government in Lagos State. I reside in Abuja, Nigeria.
I am a retired Civil Servant. Presently, I am a marketer and Blogger.
Essentially I write on marital and other related issues. I engage, as a part-time, in Marriage seminar and other related issues.
