If, despite moderating your lifestyle, your monthly income is insufficient to pay the costs of living and interest and repayments for a longer period of time, then this is called insolvency. Fortunately, debt restructuring can offer a solution.
What is insolvency
If your monthly income is structurally insufficient to pay your fixed costs, living costs, expired credit terms and outstanding bills, then you are so-called insolvent. You have too many debts and as a result become insolvent . An excessive debt burden often raises fears: fear of creditors , fear of losing your home, fear of being stigmatized as a defaulter . That fear hinders many people in their actions and even makes some sick.
How does insolvency arise?
Many people in our country finance (durable) consumer goods by taking out loans based on a permanent job and a fixed income. In itself, taking out credit (short or long) does not have to be a problem provided:
- there is sufficient financial leeway to pay interest and repayments;
- Unforeseen expenses or a reduction in income are also taken into account when taking out the credit .
However, if no or insufficient attention is paid to these two conditions, unemployment and other financial setbacks and critical life events can mean that the monthly income no longer outweighs the monthly expenses.
Which financial setbacks should one take into account?
Characteristic of critical events in life is that they occur unintentionally, unplanned and unexpectedly. Loss of work, divorce and illness or death of close relatives are often cited by those affected as the most critical life events. This is often accompanied by depression, listlessness, disorientation and loss of perspective in life. As a rule, it is a combination of several factors and individual problems that ultimately lead to insolvency. It should not be forgotten that experiences gained at home in dealing with money and the social and economic circumstances of the parents can also influence us. Negative experiences at home with money and the lack of opportunities to deal with it as a child increase the risk of ending up in a situation of excessive debt.
What can be the consequences of too much debt?
- Reminders that pile up;
- The bank will probably terminate the credit facility on your checking account;
- Your credit card may be revoked by the bank;
- There may be a threat of forced sale of your home;
- A bailiff who is constantly at your door.
Apply for debt restructuring
But as a debtor (also called a debtor), fortunately you have an opportunity to make a new start by applying for debt relief! Through the debt restructuring scheme you can rely on professional advice and assistance and anyone who adheres to such a restructuring scheme for 3 years will be rid of their debts.