Overwhelming debt problems? You are not alone in such financial difficulty

If overwhelming debt is causing you stress, you are not alone. Many people are suffering from anxiety and depression because they have difficulty paying their financial obligations and it results in debt stress.

By: Hitesh Khan/

Whatever the cause of your overwhelming debt – be it over-spending, salary reduction, or emergency expenses. such as medical bills – the action you take to beat the “bill blues” is the same.

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Talk about it. If you are depressed about money problems, you may feel alone. Yet the moment you begin to discuss it, you will find you are not only in immense company, but that discussing it can make you feel a lot better. You should sit down and figure out a game plan to help you be the most financially successful you can be.

Put it in perspective. Do you have your health? The love and support from friends and family? Focus on the good things that are happening in your life. It’s hard, but you are going to need to be optimistic to make positive changes.

Confront the problem. Rather than hiding from your lender and bill collectors? Be calm and rational. Although there are no specific laws that regulate debt recovery in Singapore, other statutes such as the Penal Code and Protection from Harassment Act may protect a debtor. For example, threats to use violence can get a debt collector into trouble. Debt collectors may be charged for criminal intimidation if they threaten to injure the you, your property or even your reputation. Debt collectors may also incur liability under the Protection from Harassment Act if they have caused harassment, alarm or distress.

What you can do when facing overwhelming debt is to write to your creditors to explain your situation.

Include what led to the problem (even if it was your “fault”) and how you plan to fix it. The best thing you can do is talk to the lenders and create a plan of action.

Fight inertia. Doing nothing, while easier than taking action, will get you nowhere in overcoming your overwhelming debt problems. Get up and get out, but resist the urge to shop if your spending is out of hand. If you are already loaded down with debt, and keep receiving offers for more credit cards in the mail, destroy them and throw them away.

Prioritise your spending. Chances are, there are some expenses you can reduce or cut out that can immediately relieve some of the pressure. Review your spending plan and eliminate expenses that aren’t absolutely essential. Prioritise according to necessity – basic needs such as food, housing, utilities and children’s expenses come first, and everything else after those.

Being in overwhelming debt doesn’t have to take the joy out of life. There are many options to help you dig your way out of debt – all you have to do is ask. Talking to a loan consultant today can get you started on your road to a debt-free life. A loan consultant can be your best friend when economic times are tough, as he or she can guide you with expertise to where less-interest loans are available for loan consolidation.

But before you approach a loan consultant, consider other alternatives, such as the various financial assistance schemes offered by various Government agencies. As you are legally obliged to fulfill any loan contract you enter into with a lender, consider whether you are able to abide by the contractual terms, bearing in mind your income and financial obligations.

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Borrow only what you need and are able to repay. Be mindful that if you are unable to meet the contractual terms, the late payment fees and interest payment will be a financial strain not just on yourself but also on your family. If you have to approach licensed moneylenders, know that the law requires them to explain the terms of a loan to you in a language you understand and to provide you with a copy of the loan contract. Make sure you fully understand the terms of the contract, in particular, the repayment schedule, the interest rate charged and the fees applicable.

The best advise anyone can get when faced with overwhelming debt is to cope with cash flow without borrowing. Regardless of how much of a financial crunch you are in, you should always shop around for the best loans with the most favourable terms. You should not rush into and commit yourself to a loan until you are satisfied with the terms and conditions.

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