How to get out of debt and heal your cash budget

Do you feel like a beast of prey, trying to take a large amount of their loans, which always run on you with inexorable maturities? Find out how to get out of debt and start living free again.

27% of Czech citizens have some type of consumer loan, with more than a third of them borrowing two or more loans. It results from a survey of the Czech Banking Association. If you keep watching your due dates on your loans make life uncomfortable, maybe it’s time to make their repayment easier or get rid of the debt altogether.

Consolidating loans will save you money

Consolidating loans

It is a merger of all your loans into one. With this step, you no longer have to keep an eye on the due dates of all your loans – you only pay one installment for all your loans each month. This not only reduces the risk of forgetting one of them and counting on penalties, but also gives you the chance to save considerable money. Loan consolidation can help you lower interest. By making only one loan of all loans, you also save on the fees associated with managing individual loans.

What other benefits (in addition to greater convenience and money saved) through consolidation?

  • Possibility to spread the repayment over a longer period and reduce your monthly payment
  • Choose a due date that suits you better
  • Possibility to increase the loan and raise extra funds

It is possible to merge not only current loans, but also credit card loans or overdrafts on an overdraft account. Did you know that you can merge loans within your family? If other family members also borrow, you can combine everything into one loan and save even more money.

Numerous banks and non-banking companies offer a single loan.

Most of them offer a combination of loans up to several hundred thousand USD, some of them in the order of millions (eg Komerční banka or Acema). Not sure which bank or non-bank company will offer you more favorable terms? Compare the individual offers and reach for the best deals.

Get money to pay off your loans

Of course, the best option for your mental comfort is to get rid of the debts and stop worrying about the amounts owed. How to get out of debt through early repayment of loans and where, however, to take the money?

It is best to use the funds you already have (for example, in a savings account or in a life insurance contract, which can be withdrawn for some insurance companies through extraordinary withdrawals). However, not everyone has the extra funds available.

What are the other ways to get money?

money loan

  • Sale of unnecessary things. Maybe at home you stumble over objects you didn’t use or remember. For example, you can easily monetize them through the Letgo app, where you take pictures and offer them to buy. You can sell them through various thematic groups on Facebook (for example, Apartment equipment Brno, Elektro bazar, etc.). Keep in mind, however, that you may be able to monetize your goods for a much lower amount than you purchased. Therefore, only sell things that you lightly heart.
  • Rental of premises or areas. Do you have a room at home that you do not use? If you live in a larger city or in an attractive tourist area, you can make good money by renting accommodation via Airbnb. Also, if you drive frequently by car, offer the area for advertising. Thanks to this you can come to a considerable extra income – try for example page BigInDebt.com.
  • Deposit from the employer. Some companies offer a wage deposit among their benefits. So if you have a smaller loan that you would like to get rid of as soon as possible, try to ask your supervisor or payroll office to “set up you.”
  • Přivýdělek. Nowadays, when job portals abound in countless offers, it will certainly not be a problem to find some form of brigade. But who would like to be slaved at the bar or in the supermarket in the evenings? The solution may be some extra earnings online that you can do when you take a bus from work or watch your favorite show at home. On the Debtnomore.com website, you will enter an offer of your services (for example, transcription of texts into electronic form, writing reviews on the web or online shop, or any service that you can provide quality). If you are a creative type, you can offer your handmade products at Liedebt.com.
  • Temporary relocation for better earnings. Is your debt much higher than in the order of tens or thousands and at the same time you live in a region with higher unemployment, where decent paid work is difficult to find? In that case, consider seasonal work in one of the richer countries. Did you know that, for example, in Switzerland, the minimum wage is about 80,000 USD? You can find a job abroad at the Lite Lender portal (just enter the name of the country in which you would like to work in the left search box).

Debt trap: divorce settlement

The extrajudicial divorce settlement agreement

The extrajudicial divorce settlement agreement

Most of these experts recommend an out-of-court divorce agreement prior to the final divorce. This means that questions about joint home ownership and assets will be clarified before the divorce is due to go to trial. The court date is then only a matter of form, since all important issues have already been settled. The negative financial consequences of divorce cannot be avoided by the divorce agreement, but at least mitigated. They guarantee planning security and, above all, legal security, and rash actions such as the emergency sale of a house can thus be avoided.

What are the financial consequences of a divorce?

What are the financial consequences of a divorce?

The costs for lawyer and court

The fees for the lawyer and the court in divorce proceedings depend on the so-called value in dispute or the procedural value. This depends on the spouse’s income and assets. The value is calculated from the triple monthly net income of both spouses.

simple calculation example :
Net income of the wife 1,500 USD
Net income of the husband 3,500 USD
A total of 5,000 USD

5000 x 3 = 15,000 USD process value

Once the total procedural value has been determined, the court and attorney fees are calculated in accordance with the legal requirements. With a procedural value of 3,000 USD, this is approximately 840 USD, with a procedural value of 40,000 USD, almost 4,000 USD.

Cost of moving and running two households.

As a rule, at least one of the partners leaves the shared house or apartment and will have to run a second household in the future. If both partners have to move out of the common house because one spouse can no longer maintain a larger property alone after the divorce, two moves are due and two new households are established, while the original property is often sold in a hurry and often below value.

Payment of maintenance costs

Maintenance costs for the children and possibly the spouse become due with the divorce.
The “Düsseldorfer table” is used to calculate maintenance, especially child maintenance. It is graded according to the child’s net income and the age of the child. Maintenance payments after a divorce can severely affect your prospects financially over a long period of time.

Common property

Large financial losses can occur if the spouses have acquired common property and both are registered in the land register. In the event of a separation, the property can then be auctioned if no amicable settlement can be reached. This debt trap can be avoided by agreeing the separation of goods. Otherwise, the statutory property regime of the profit community applies. Anyone who signs a marriage contract can record the division of assets such as houses or land in writing.

Common debts

In the case of jointly concluded loan agreements and rental agreements, the creditors, in this case the bank or the landlord, can stick to one of the spouses and demand the total amount from him / her. This is the external legal situation. In the “internal relationship” of the partners, both partners have the obligation to pay the obligations proportionately. If one spouse paid alone, he can demand half of the amount from the other.

What to do if one of the spouses is in debt?

What to do if one of the spouses is in debt?

If one of the spouses is already in debt during the marriage, the other partner should take appropriate measures to protect themselves from over-indebtedness. Because both spouses are only liable for joint debts. For contracts that only one partner has signed, the other partner cannot be held responsible. Incidentally, this also applies if no separation of goods has been agreed.

The following are the most important tips for protecting yourself from obligations in connection with your partner’s debt:

  1. Separate accounts
    If one of the spouses is in debt, it is advisable to keep two separate accounts.
  2. Joint purchases
    The partner who is not to blame should make new purchases and keep the receipts as evidence so that he does not lose his property in the event of foreclosure at the partner.
  3. Be careful with guarantees
    Anyone who guarantees the partner must continue to guarantee and pay after a divorce if the former partner is unable to pay.