Getting in Control of Debt
The start of the year is one of the busiest times for the Citizen’s Advice Bureau for calls about debt and finances. It seems to be the time of year that people will either take stock and recognise their finances have gotten out of control, or simply that they have spent too much over the Christmas period, and they need a little help to get back on track. Whether you have a lot of historic debt, or just one too many credit cards that your would like to get on top of, there is always a way out of debt, be it working out a more sensible repayment scheme, to declaring yourself bankrupt.
Is it reparable?
The first thing you need to do is be very honest with yourself about exactly how much you owe. A good rule of thumb is to establish whether your debts, excluding your mortgage if you have one, total more than you earn in a year. If they do, then you should seek advice as you may be in debt crisis, and it will be hard for you to get on top of your debts. You can seek advice about bankruptcy and find out if there is anyway the interest can be frozen. If you’re debts total less than your annual salary, then it’s likely you will be able to sort them out without any drastic measures.
Could you be paying less?
No two debts are the same, and the amounts and level of interest on each will mean that the severity of each debt, and the length of time it takes to pay back will vary massively. Identify where you are paying out over the odds in interest, and making very little dent in the actual amount owed. Borrowing money to consolidate your existing debt, and allowing you to pay less in repayments on a lower interest rate is not the same as borrowing more, and you should never be tempted to add to your debt when taking out a loan to help with the existing figure. You can speak to someone about this by calling the Loans Direct telephone phone number and explaining what you are looking to do.
Are you communicating enough?
When in debt, the temptation can be to cut off entirely from your creditors, avoiding their calls and doing nothing about letters. In fact, if you are open and honest with them, you might find there is something that can be done to make your life easier. Pick up the phone and call each of your creditors, and explain that you are finding it hard to pay more than the minimum amount and ask what your options are. Let them know that you are working to find a solution, and they will be more inclined to help than if you just intend to ignore them and miss payments. Escalating issues often helps too, so ask to speak to someone higher up who may have the authority to pause your interest, or take down your payments to a more affordable amount.
Don’t hide from debt, as this will only make the situation worse. Confront any issues head on, no matter how scary they seem and you will be able to find a way to resolve them. Be prepared to adapt your lifestyle while you sort out your finances, as you can’t expect to get out of debt without making some sacrifices in terms of your other outgoings.
Bill Turner is an animal rights activist and writer. He spends much of his time outdoors with his dog and enjoys travelling the countryside to explore nature.