I’m Almost Drowned in Debts in India – Ram


“Dear Steve,

This is Ram from India and i am almost drowned into the debts.

My monthly earnings after my business and house expenses are Rs.25000(the max). I have debts to the extent of rs.30lacs of which rs.4lacs(against full surrender value of my insurance policies) and remaining rs.26lacs(in the form of overdrafts, personal loans and credit cards).I have nothing to pledge and take a loan to pay off the debts.

Till this date i have managed to pay the monthly dues without any miss. I don’t think that this situation is healthy as it worsens my situation year after year. I too don’t want to become bankrupt or not to cheat the bankers.

I know i am responsible for my debts. Is there any possibility to get out of this by paying lesser amounts that is emi fixing my budget so that both banker and me are saved against bankruptcy.

I don’t know what schemes we have in India regarding this one. first of all is there any chances of getting loan for a lower rate of interest and ina long run without any security. I am sure that i have a good relationship with the bankers. Can you please let me out


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Dear Ram,

Help in India for people with money problems is limited. The Financial Literacy and Credit Counselling Centre (FLCC) scheme is still a work progress in providing help, with much of it coming from the banks themselves, although not successfully. See “I’m in India and Drowning in Debt and Looking for Debt Consolidation. – Rao” for more information.

The first step for you to take would be to get a good understanding of your budget. If you can clearly identify how much money you make and what that money is spent on you can then show your creditors your income and expenses. From that you can put together a repayment proposal based on what you can afford and take that to your creditors and ask them for their acceptance of the plan.

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If you present your bankers with actual facts and figures they are more likely to accept your proposed repayment plan.

What concerns me most about your question is that you say that things are getting harder for you each year to make the payments. This indicates that either your income is slowly diminishing or that your financial obligations are slowly increasing. Either situation, or a combination of the two, is not conducive to getting out of debt.

Only by negotiating with your creditors and seeking their acceptance will you be able to repay your debt for less than you currently owe. The bad news is that it requires their participation in your repayment scheme but the good news is that if they agree, they will work with you to achieve the target goal.

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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