My partner and I used credit cards to extend the life of our business. Now the business is finished, but the debt has never stopped piling up. Our income can only pay off our bills and the 10% minimum required payment on the cards. How can we improve our situation?
ANSWERED BY...Teera Phutrakul, CFP, Chairman, TFPA Taking out a loan with at 20% interest to tide over a business is never a good idea. The cost is never ever going to align, as I am sure the business did not generate more than a 20% return on equity. But what's done is done, so let's concentrate on how to get out of this hole you've dug yourself into.
First, you need to negotiate with your credit card company to replace your existing loan with an instalment loan (also known as a personal loan) or refinance the debt with another provider that can arrange a debt consolidation loan to give you breathing room in paying down the debt.
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