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As a first step towards solving debt woes, make a budget and stick to it. Prepare
a budget sheet such as the one below. The sample illustrated contains some typical
income and expense items (there may be more items).
To estimate your expenses, refer to the previous bills. Once you have put everything down in paper, you can see quite clearly where and how your money is spent. You can then go down the sheet logically to see where the spending "cuts" can occur. The point is you will be able to control your life style more successfully if you have everything outlined on a budget sheet. Try not to live beyond your means. You will sink deeper if you maintain bad habits like spending more than you can afford. All in all, you have to ensure the recovery of your credit standing.  Creditors usually consider several factors when giving out loans. In order to fully assess the financial credibility of the borrowers, they rely heavily on credit history - record payments on credit cards, loan repayments, etc. Timely credit repayments will gain you more points. You will not likely be granted any credit if you have not established a sound credit standing - history of delinquent payments or bankruptcy Although you could get a guarantor to support your credit application (in the event that you default, your guarantor will be liable for the credit), it is better for you to establish your own credit record. Besides, your guarantor could be in need of money himself. Since applying credit for future financing will be difficult due to poor credit history, the affected parties will be forced to seek other sources. But where and how? Get more than one opinion. As problems often vary greatly, seek assistance from professionals. Their advice will be helpful particularly for burnt-out cases. It is could be worthwhile paying a little fee to ease your burden. Parents trying to regain their bad credit would find it difficult if they have children who overspend on their behalf. Most children do not look at the pace tags when purchasing items at supermarkets. Many have not even experienced the consequences of overspending. It is vital that parents spend time talking to their children on budgeting. Children should be taught how to save at a young age. Open bank account for them and show them the magic of compounding works. Instill in them the virtues of savings. By all means give your children an allowance but do not automatically pump in money for them if they spend the money too quickly. Let them feel the pain of overspending - no pain, no gain. Many parents tend to use money as a substitute for attention and love.  Depending on the level of debt involved, personal bankruptcies cannot be ruled out. Rising interest rates will not help at all. The benchmark three-month Kuala Lumpur Inter bank Offered Rate (KLIBOR) rose above 10 percent for the first time in six months recently. For the burnt-out cases, the task of repairing your credit will be even more difficult. A lot depends on your will to live through this hard times. Many have been made bankrupt but managed to emerge stronger and even better through sheer grit and determination. Most importantly, do not give up hope and run away from your debts. Pick up the pieces and start from scratch. Where there is a will, there is a way.
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