Virtually everybody has some form of debt. This may be money owed on a Credit Card, a Bank Overdraft or Loan or of course the good old Mortgage. Debt in itself is not necessarily the problem – it only becomes an issue when you are unable to make the monthly repayments.
If you do find yourself in a position where you are unable to service your debts on a monthly basis, it is paramount that you seek help as soon as possible. It is far too easy to bury your head in the sand; finding a way to muddle through each month but without really ever getting properly to grips with the issue.
Here are some useful hints and tips to help you.
1. Complete a Financial Makeover
You may feel like you are just managing to make your payments each month. What may help is if you do a detailed income/expenditure account or financial statement.
List all your outgoings on one sheet and all your income on the other. The difference is obviously your surplus income which you need to live on. If the outgoings exceed the income then it is quite apparent you need debt advice.
However, by carrying out this activity you may be able to cut back your spending on some items. At least you will have chance to consider and realise exactly what you spend your money on.
2. Take Control of your Situation
a. Work out the scale of the problem
Make a list of your debts and prioritise them in terms of importance.
b. Draw up a realistic budget
See if there is anything you can cut back on before working out how much of your debts you can afford to pay back.
c. Talk to the people you owe money to (Creditors)
If you have defaulted on any monthly payments then is it a good idea to contact that Creditor to explain why the payment has been missed or late. Don’t ignore the problem.
d. Repayment options
Work out how much you will be able to afford to pay each Creditor and contact each Creditor to agree to them accepting a reduced payment if necessary.
e. Get advice
If, after doing all of the above, you feel your debts are beyond your ability to deal with, do not hesitate in seeking debt advice. Debt advice can not only help you to get the burden of your debts off your chest, which is likely to make you feel better in itself, but a debt advisor will also be able to provide you with advice and practical steps you can take specific to your situation. There are plenty of free debt advice agencies which do not charge for their service. The Citizens Advice Bureau is the most prominent amongst the non for profit sector.
You can also contact me on 0125 460 6090 and I will be able to give you free assistance and advice with regard to your debt problem and the best solutions for you.
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