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Debt Trap

What is a Debt Trap?

A situation where total debt and other expenses are close to, or exceed (disposable) income.

In this situation a person has borrowed too much and due to the interest payble the amount of the loan cannot be reduced. There is little or no surplus in their cashflow.

Borrowing More Makes It Worse

Many make the mistake of borrowing more to help pay off the loans without realising they are only making the situation worse. They increase their expenses (new loan repayment) thus increasing their cashflow loss each month.

How To Get Out of a Debt Trap

The only ways to get out of a debt trap;