Debt Counselling: Ideally, debt should be used to buy appreciating assets like real estate. Debt may also be advised to cover an expense that increases the asset’s value, such as an education loan to upskill, so that the person’s potential to generate revenue rises. Using debt to fund variable or dangerous investment propositions carries a significant level of risk and could jeopardize one’s complete financial well-being. One investment that uses margin financing is stock market investing. The loss will be magnified if the investment’s value drops, because the cost of debt must also be considered. Debt should never be used to pay for normal expenses. If someone starts taking out loans to pay their bills, they are plainly living over their means and are likely to find themselves in a debt trap. Taking on short-term debt to tide over short-term liquidity issues may be acceptable if the borrower is aware of the risk and has a strategy in place to repay the debt as quickly as feasible.

When a borrower is unable to pay back their debts, it’s important to find a solution as quickly as feasible. There are many potential solutions to manage it effectively that we assist in.