A recent report in an Australian newspaper states that one in three businesses are worried about going under, or not have enough money to pay their employees in the near to middle future. Business costs are escalating to such a point that profit margins are narrowing or are becoming non-existent. Some business blame the government for over regulating their industry and adding unnecessary costs to meet higher standards, increased licence fees, additional statutory payments to employee superannuation plans and for providing more public holidays than ever before.
Consumer spending is also down. Many customers can't afford to spend any more because of increasing fuel costs, rising energy prices, high mortgage payments and increasing food prices. Whatever the reasons, a significant proportion of small businesses are experiencing drastic cash flow problems.
The danger of course is that if you run into financial difficulties and are struggling to pay your debts, the mortgage is the one which will also have the greatest repercussions if you don't keep up with the payments. If you fail to make a couple or several payments on your mortgage, the lender will soon be writing to you demanding an explanation. Continued failure to meet the monthly or fortnightly mortgage payments could mean your house is repossessed, leaving you homeless and with a debt that will continue for the life of the mortgage.
If you find yourself in this financial difficulty and are receiving letters of explanation from your mortgage lender, don't ignore them. The problem won't go away and will only get worse. You could lose your house.
You could try cutting up your card before the credit card provider does it for you. Contact your credit card provider if you feel you can't make any payments in the near future. They will often suggest some form of debt planning to assist you with paying off your credit card. It is in their best interest after all.
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