Dealing with Debt: Strategies for Financial Recovery 

It is hard to find a middle-class man without debt. It is often regarded as a negative sign. However, it is that very debt which helps the middle-class man overcome hardship, provided it is managed vigilantly. This means loans are helpful and offer financial assistance. On the other hand, situations like job loss, medical emergencies, business failure, legal issues or other unexpected problems may arise, putting him in a position where he is unable to repay the loans. Regardless of such circumstances it is very important for a middle-class man to manage his debts responsibly. 

Here are some strategies/tips to deal with debts. 

• When debt is manageable 

1. As a popular saying goes: “One should not borrow more when already burdened by debt”. Hence, it is wise to  put a limit on your borrowing and focus on repaying the debts rather than accumulating new ones. 
2. Know your debts. List down all your borrowings and liabilities along with the respective financial institutions. Make sure to include your outstanding amount with interest. Categorie your loans, for example secured loans and unsecured loans. (Pro tip: organize the list in either ascending or descending order of the outstanding amount for prioritisation)
3. Work on your budget. Track your total income and  expenses carefully. Firstly prioritise your basic needs such as food, shelter, utilities followed by debt repayments, avoid unnecessary spending and ensure every penny is accounted for. 
4. Adopt a repayment strategy. Generally there are two debt repayment methods. 4.1. Debt snowball: Focus on paying off the smallest debts for quick wins. 4.2. Debt avalanche: By paying off the debts with higher interest allows you to minimise the interest rate on a longer run. (Pro tip: Consider paying off the debt that poses more liability or great risk. For example, Pay off House loan debts to secure the house from losing it, rather than prioritising to repay the car loan.)

• When debt is unmanageable 

5. Communicate with your creditors: In case, if you are struggling for repayment, inform the creditors regarding your financial struggle and ask them to lower the interest rates, waive the late fee or offer a settlement deed. Communication in the early stages can help you avoid serious consequences in the future. Many creditors are open to negotiation to minimise their own losses. They are often willing to workout a manageable solution. 
6. Consult a legal advisor or seek professional help: If your debt becomes unmanageable it is crucial to consult a legal advisor. They can guide you through your options and make you acknowledge your rights and provide assistance to manage or settle your debts effectively. 

Debt repayment is a long journey, do not panic over small hurdles. Stay consistent, motivated and protect your mental health. Try to overcome the setbacks. The challenges are part of the debt repayment process but with discipline, consistency, patience and right support, financial recovery is achievable. Start today and take control of your future.