There are two types of debt, good (equity) debt and bad (consumer) debt and its important to know the difference between the two to understand when debt is a problem.

Good (equity) debt includes borrowing money for a house or other investment that is likely to appreciate in value and build wealth. Bad (consumer) debt includes things like credit cards. Simply put, debt is a problem when you have more bad debt than good debt.

Debt Fix recommends a balanced approach with goal setting being a key element in handling debt. For instance, a financial goal may be to own a property within 2 years. A crucial step in reaching that goal is to reduce the amount of bad debt (credit cards and personal loans) that drain and place pressure on the amount of disposable income available. By putting in place a strategy to decrease bad debt, your savings ability strengthens. In this way, savings are another key element to reaching financial goals.

Coupled with a low level of bad debt, savings can be used to increase wealth through building capital and strengthening borrowing power for capital purchases. It's important also to have an acute understanding of your budget, i.e. there is no point in borrowing money for a capital purchase if the loan cannot be serviced. One of the most heartbreaking things that Debt Fix sees every day is people that borrow money for a house and then cannot afford the repayment commitment. This situation seems to be more and more common and it’s a very easy trap to fall into.

Debt Fix provides assistance for people that are struggling financially. If you have found yourself in financial difficulty and debt is causing stress and concern, Debt Fix can help. By contacting us on 1300 332 834 or email, we can assess your situation free of any obligation or charge.