Especially if the lender is willing to understand your problem, you might find it surprising that he may reduce the interest you owe, or even give you more time, in the sense of prolonging the term of your loan, thus resulting in smaller monthly payments for you. Certainly you need to prove somehow that it is impossible to you to continue the payments as scheduled, based on your present financial situation. In the case of a joint loan for example, due to job loss one of the parties cannot continue paying, while the other cannot support the whole of the payment required; or, it might be the case of an illness which holds one back from daily activities, including work; and there are many other reasons which are basically well founded, but the lender cannot have knowledge of these, unless he is informed regarding the situation.

Turning to professional advice is the second in line, especially if you got so tangled up in your financial problems that you cannot see a positive way out. An expert in the field can always make you see things clearer, and even if it will not lead you to totally erasing your debts in no time (because that is not possible, realistically!), it will definitely help you having your finances organized. You may contact a debt counseling agency, where a professional debt counselor will redirect you towards the action you must take. You just have to be careful when choosing such an agency, as the market is abounding in offers, although not all are offering top services. Check that it is fully licensed, and if it is an NGO (Non-Governmental Organization), it is even better. Especially if you fell you cannot manage on your own your finances, it is advisable that you seek the advice of an expert who will act on your behalf in arrangements with your creditors.

Depending on the amount you owe, there are several debt management programs you can enroll into. Again, the advice of an expert will help you find the perfect program tailored to your needs. It is true there will be some fees for their services, but you will have your problem examined by professionals. If your debt is equal, or much higher than $15,000 you can opt for the IVA (Individual Arrangement Program). Individual Voluntary Arrangements will guide you through a payment schedule which is tailored to your needs, and will have you paying for no more than 5 years. If you go through the program successfully, in no more than 5 years you should be debt-free.

The option of a debt consolidation loan is really a measure if you do not have huge debts hanging around the corner. This option is only a tool which will serve you on an organizational basis: instead of say 3 deadlines you have to meet monthly (three different loans), there will be only one single payment/month. It is a good solution also in the sense you will be able to better organize your income/s. However if you do have serious debts, then you should not consider making another one whole in your budget by contracting another loan, because chances are the situation will only get worse.

Concluding, there are a few points you should have in mind when you are facing financial struggle:

• If you cannot cope with the payments towards your loans, never take another with the pretext to “consolidate” them; it will not help
  
  
• If you have good managerial skills, take action into your hands: contact the creditors
  
  
• If you do not have good managerial skills, leave action for others: contact a credit counseling agency
  
  
• If you consider filing for bankruptcy, reconsider it by seeking professional advice

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