Debt Management

Debt management is a process whereby you actively manage and review what you owe, to ensure that you are not paying any more than you need to, when purchasing assets. While reviewing your portfolios is considered to be an essential part of the asset accumulation process, so too should be the regular evaluation of your debts and liabilities.

In essence, it is essential to not only carefully select the lending solution at the outset, but to also regularly review whether the long-term lending product you committed to is still the right choice for you.

As long as you remain in control of your debt and you stay on top of your repayments, debt will not be a problem for you. But if debt starts to control you, rather than the other way round, you need to take action. We recommend that you contact one of the financial planners at Intellichoice for a free 30 minute review of your finances and how we can help you manage your debt.

Below are some tips on how you can manage your debt:

• Manage your finances and plan your budget, so that debts do not build up and take you by surprise. Download a copy of our budgeting worksheet to work out your income and expenses
• A free and independent financial counselling service may be able to help you if you are having trouble paying your debts or managing your budget
• If you cannot meet your financial commitments, contact the creditor (the business or person you owe money to) without delay to discuss a repayment plan
• When negotiating a repayment plan, be realistic about what you can pay. Take into account your other financial commitments. Be honest with the creditor or debt collector about your situation
• Keep copies of any letters you send or receive (and notes of any conversations you have)
• Make sure you actually owe the debt. Ask for proof (eg documents, account statements) if you think a debt is not yours or if you disagree with the amount demanded. Get independent advice if you are still not sure whether you have to pay some or all of a debt
• If you are contacted about a debt that is several years old, do not confirm the debt or make a payment until you get independent advice
• If you are threatened with legal action, get advice about your options as soon as possible
• If you are contacted about a debt, be cooperative, and expect to be treated professionally. Make a formal complaint if a creditor or debt collector misleads you, threatens you or is abusive.