Three Ways to Address Informal Debt
Debt can be difficult to resolve. People may fall into a debt cycle because of an emergency, insufficient money for daily expenses, the need to invest in a business or borrowing to repay an earlier debt. Informal borrowing can make the situation more severe because high interest creates an additional burden. If you have informal debt and want to make a fresh start but are unsure where to begin, consider the following approaches.
Three ways to address informal debt
1. Stop unnecessary spending
If the debt arose from overspending or a lack of savings, reduce non-essential expenses immediately so that more money is available for repayment and future savings, helping avoid further debt.
Keeping an income and expense record can show where your money goes and identify spending that could be reduced.
2. Ask an intermediary to help mediate the debt
Contact the Office of Rights Protection, Legal Aid and Legal Enforcement under the Office of the Attorney General at hotline 1157. The provincial informal-debt mediation subcommittee can act as an intermediary between a debtor and an informal creditor to support a fair negotiation.
3. Explore a regulated source of finance
A regulated loan may be one option for settling informal debt, subject to credit assessment, the applicable terms and the borrower’s ability to repay. Compare the total cost carefully and avoid creating a new repayment burden that is not manageable.
Some people may worry that a financial institution will not approve an application because they have a low salary or no guarantor. Muangthai Capital offers loan products for customers who need funds, subject to the Company’s eligibility criteria and assessment. Review all terms and make sure repayments are affordable before applying.
