Most people have debts of some form or another, and with the recent happenings in the financial sector it is understandable to feel anxious surrounding your own levels of debt. Perhaps your debt is manageable just now, but can you feel confident that it will still be manageable six months from now?
Having debts or bills to repay often feels like an ever-ending cycle, and unfortunately for many people, falling into debt is very easy to do, but infinitely more difficult to get out of. Debt is commonly associated with a person’s reckless spending, but there are in fact many other reasons for people falling into debt, such as losing a job or the end of a relationship. Debt can also affect anyone in any walk of life, but no-one should ever feel ashamed of their debt problem as help is available.
If you are in debt, there are some steps to take to help break the cycle and get your finances back on track. It’s always advisable to tackle your debt problem step-by-step and seek some legal advice if you’re unsure of your options.
Firstly, make sure you owe the debt in the first place before you part with any money. Just because you receive letters demanding payment, doesn’t necessarily mean you owe the money. After all, it could be for an old debt you’ve already settled, or a demand made to a previous occupant of your home. Check your credit report and if in doubt, ask a specialist debt counsellor or solicitor for advice.
Next, calculate your income and expenditure to see how much you currently spend and where savings can be made. Examples include taking a packed lunch to work each day, rather than visiting the coffee shop. Any savings you can make can be allocated towards clearing your debts.
Once you have an idea of how much you can afford to repay towards your debts, you should approach your creditors with an offer of repayment. Always approach the most important creditors first, such as your mortgage lender, utility company and local council. Then, once you have reached agreement with them, do the same with each of your remaining creditors. Most, if not all, will be happier to receive token payments rather than nothing at all – be honest with them about your circumstances and they’re more likely to agree to your offer.
Remember however, that even though you may have an agreement with your creditors, most agreements will be reviewable after a period of time, usually six months. Hopefully by this time your circumstances may have changed to allow you to increase your payment, so keep in regular contact with your creditors and inform them of any changes in your circumstances which may affect the amount you can pay. However, even if your circumstances don’t change, it’s important you maintain payments made under your agreement – if you don’t then your creditors may decide to pursue recovery of the debt.
Above all, don’t panic. Getting out of debt is a long, hard slog and while you might think you may never escape the clutches of debt, you don’t have to face the problem alone. It is possible to obtain comprehensive
debt help and advice through a variety of sources, especially if you’re not confident of going it alone in tackling your creditors under your own steam.
Isla Campbell writes for a digital marketing agency. This article has been commissioned by a client of said agency. This article is not designed to promote, but should be considered professional content.
