Dealing with debt, Steve and Jenny come to you as their financial adviser. What advice can you give them on how to deal with their situation? Please explain your answer.
Leverage is a double edged sword and if you're caught at the wrong side, you'll land yourself in big trouble. I will advise them to -
1. I'll try to find out their credit repayment ability.
2. I can ask them for rescheduling their debt with their creditors.
3.I can even ask them to cut off their spending.
4. Any deferment if debt payments and any haicuts will of utmost advantage.
5. They can even take interest tax shield available on debt and maximize their overall burden.
6. They can have exposure in other asset classes and try to beat the cost of debt.
Dealing with debt, Steve and Jenny come to you as their financial adviser. What advice can...