Being a single parent comes with tremendous responsibilities. Some days you may feel overwhelmed, awestruck and paranoid with having too much to deal with.
This is one of the reasons so many single parents get into financial trouble and difficult to manage debt circumstances.
The Financial Scenario
The single parent scenario is becoming more common these days with the rising cases of divorces worldwide. Again, more and more unmarried parents are taking up childcare responsibilities alone.
If you are also a single parent, you know how difficult it is to raise a child all by yourself. There is a single income source, and you are the sole provider for your child’s wellbeing.
This adds more burdens on the shoulders. With an insufficient income, lack of savings or emergency funds to cope with, single parents have a hard time planning their budget out of a single income.
Frequently, near the end of every month, the crunch is felt. Single parents struggle to go through the last few days with whatever is left. This sets the bait for many parents who fall for the trap of credit cards or payday loans.
The Temptation to use Credit Cards and Payday Loans pull you into Debt
The biggest temptation becomes the credit card at the end of the month. With bills left unpaid and the month’s pay exhausted, it is easy to fall for this temptation.
Often you would punch their card to make a few payments at the end of the month in sheer desperation. You may plan to or think about paying back, but this plan often fails, as you get burdened with the new month’s expenses again.
Sometimes you feel inclined to get a small loan when some unforeseen expenses arise. This will leave you with no choice but to go for a payday loan. That too is the inception of a fatal debt problem if you have insufficient income to meet your next month’s expenses.
Of course, you will have to pay back the loan with interest. Such problems often pull you closer to a debt tangle which you cannot free yourself from.
Unmanageable Student Loans and other Debts
Another cause of debt which you may face as the single parent is student loans which you took on your behalf. Also, many other loans like a car, jewelry or home mortgage, may be the reasons you’re struggling.
It could be that you took loans before your divorce, and now the loan repayment responsibilities rest on your shoulders as you’re struggling with a single income. It may also be the scenario that led by a small income due to being single, you went for much-needed financing through taking loans.
Both ways, you may feel highly indebted and miserable if you cannot service your debts.
What Happens when you cannot Pay Back your Debts?
When you cannot pay back your loans, you feel miserable due to collection calls and recovery attempts. Of course, you will get visits at home and work which can be embarrassing.
These cause more mental stress and tension and interfere with your mental sanity after a certain time. Parallel your credit rating and history both start getting badly affected due to non-payments of debt installments.
The path to getting loans in the future also gets closed eventually, when your credit score has suffered too much damage.
How to Plan for Debt Relief?
Before your debts start strangling you and cut the life supply, you must fight back methodically. There are government grants for single parents under the poverty level, and grants also for children living with single parents.
While you may collect information about them to apply for some of the grants you are eligible for, you must also contact your creditors and other non-profit helpful organizations for managing the debts.
Contacting creditors to discuss your situation and carve out a mutually acceptable plan to settle the loan, is a good step. You can do this whether it’s a car loan, a home loan, student loan, a payday loan, or a credit card loan.
You may also get help from charitable or non-profit organizations, which helps single parents with insufficient income under heavy debts, so that they may raise their child. For other sources alike visit here
How to settle your debts?
Settling debts can be a bit tricky if you are all on your own. Instead, you may try consulting a debt consultant or financial advisor.
There are debt settlement agencies and services, which can act as the middleman to talk on behalf of you with your creditors. Moreover, you may seek the professional help of one such service to get help.
A debt settlement service would give the creditor an offer on your behalf of a payment of an amount towards the full and final settlement of the debt. This amount would be a lower amount than you actually owe so that you can afford to pay the sum.
However, there lies the trick. Since it’s a game of negotiation, you may have to wait for months or years while you stop all your payments towards that creditor and also suffer losses through hampering your credit history and rating.
How Systems like Debt Consolidation works?
Debt consolidation is another good way to manage debts. Many single parents have found relief in this method too.
Debt consolidation allows a combination of all existing loans. This enables payment of all previous loans from a single account while you can continue paying the fresh loan through a longer term with less interest and manageable monthly installments.
Going Forward
There can be many ways to manage debt and fight with debt and financial crises. However, the best you can do in situations of financial crunch is to avoid getting into debt at all. The lending money will result in a pressure of paying back, and this you must remember as the sole earner and single parent to stay out of the mess.
Life doesn’t have to be chaotic for single parents. With adequate planning, you can enjoy single parenthood in happiness and at the same time, give your child the best life they deserve.
