Getting Out of Debt: Rule# 4

"Pay off your debt!"

My mother owns a small sari-sari store. As what usually happens in this type of business, a lot of people owe money from her. There are some who don't pay their debt and instead start avoiding my mother and patronizing other sari-sari stores, my mother's business competitors. This really upsets her...who can blame her?

When my mother is upset with a debtor she would usually tell me, "...if only Mr./Ms. So-And-So would pay me P20 per day I would be fine with that rather than seeing him/her pass by my store as if nothing happens, and with no explanation why he/she couldn't pay as promised."

No matter how big or small your debt the only way to get out of it is to pay it off. Ignoring your debt is not only very irresponsible, but also immoral. You don't only owe money to your creditor, but you also have moral obligation to him/her. Don't forget that during your times of need your creditor was able to help you, so it's only right, and fair that you treat him well by paying off.

However, if you have too much in your plate then instead of avoiding your creditor, why not talk to him/her. Apologize if you have to -- you owe that also to your creditor if you can't pay as 'you' promised -- and negotiate for a easier payment term, something that you can afford while not spending more than you earned.

Like my mother, your creditor would still be upset specially if he/she needs the money, but at the same time you will earn his/her respect for doing what is right even when it's very unpleasant. Your creditor would mostly like agree to receiving smaller down payment than not receiving anything from you at all.
 
Taking legal action is too much hassle, not to mention costly, to your creditor as much as to you. But if you make him/her angry then he/she might bite the bullet and sue you. And this would only add trouble to your existing troubles.