It is important to seek the understanding and support of family members when facing heavy debt, says Mr Alfred Chia, chief executive of financial advisory firm SingCapital.

Major debt causes bleak emotions and feelings of helplessness, even uselessness. If these feelings are not contained, they will only worsen and getting back on track will be harder.

"It will be good to gather the family stakeholders to work out the family's expenditures and seek everyone's support. You will be amazed by how supportive your family members will be," says Mr Chia.

There are several avenues open to a borrower seeking help. These include the banks, which offer the Debt Consolidation Plan (DCP); Credit Counselling Singapore, which has the Debt Management Programme (DMP); seasoned financial advisers, and so on.

It is prudent to understand the implications of these debt management schemes. For instance, the DCP and DMP have different criteria and requirements. Under the DCP, you can still own one credit card with a credit limit of a single month's income to cater to your daily needs. This is not permitted for those under the DMP.

Mr Anthony Seow, head of cards and unsecured loans at DBS Bank, says a DCP offers the convenience of consolidating all unsecured outstanding balances from multiple accounts with all the banks into one monthly instalment repayment plan at an affordable interest rate. He says that in most scenarios, the DCP customer would have a lower monthly instalment to repay than if he were to manage the different accounts individually.

"For example, someone without a DCP would likely be paying around 3 per cent of his total outstanding on a monthly basis at an effective interest rate in excess of 20 per cent per annum. With the DCP, the monthly repayment would be around 2 per cent of his total outstanding and at an effective interest rate in excess of 10 per cent per annum," he adds.

And if you are considering the bankruptcy route, Mr Chia advises that there are long-term implications, such as the inability to apply for mortgage loans and the effect of the bankruptcy status on employment opportunities. Many employers have strong reservations about hiring bankrupts.

Any plan that addresses debt will require you to adjust your spending, with a big focus on paying off those debts with the highest interest rates first.

Mr Chia also suggests focusing on the smaller outstanding sums. Once you settle these, you gain confidence that you can manage and are in control. "Gaining back the confidence is of the utmost importance," he adds.

Mr Seow advises customers to update their latest income records with the relevant financial institutions. This will help to avoid any inadvertent suspension of their credit cards and unsecured loan accounts as a result of outdated income information.

DBS/POSB credit card and unsecured loan customers can update their income online at go.dbs.com/sg-iu

If you do not pay your bills for credit cards and unsecured loans in full, look out for an information disclosure statement that you will get from your bank. This initiative started in June 2015.

The statement sets out the total amount and time needed to fully pay off your debts if you pay only the minimum payment each month; and the amount of debt that will accumulate by the end of six months if you make no payments during this time. Each table will be customised to a borrower's circumstances. This information aims to help borrowers understand the costs of being in debt so they can better manage spending and cash flow.

If you have outstanding balances on your credit cards or unsecured loans, it is prudent to pay more than the minimum sum each month if you can manage it, and stop spending on the credit cards or using the unsecured loans.

You can find a sample disclosure statement in the MoneySense website.

Lorna Tan