Debt Control

 

Gain Control Over Your Debt

 

 Many people find themselves in debt at some stage in their lives. Most have a combination of credit cards, loans and overdrafts to deal with. Debt can put people under a lot of stress and pressure and it is hard not to fall into traps which could make the situation much worse.

 

 First and foremost it is easy to just try and ignore the debt. It won’t go away and the longer you leave it debt, the worse it gets. The best solution for debt is to get in touch with your creditors straight away and explain your debt difficulties. Back this up in writing with a detailed personal budget outlining your income and outgoings and any other debts to show the creditor how much you can realistically afford to pay each month. Make sure you contact everyone that you are in debt too or you could find yourself in the same situation again later on. When contacting your creditors if the person you speak to is unhelpful do not be scared to ask to speak to someone more senior who may be able to agree to your offer of payment.

 

 Try to deal with your debt in order of priority, for instance debt that could cause you to lose your home, cut off gas or electric or lead to fines should be tackled first. Make arrangements to pay essentials like your mortgage as the consequences from failing to pay are much worse than failing to pay a store or credit card. Thus losing your home and making your situation much worse.

 

 Taking out a consolidation loan could seem very tempting, as they offer to reduce your monthly outgoings, taking the hassle out of having to pay separate creditors every month. Be very cautious about borrowing more money when you are already in debt. Get advice and think very carefully about it especially if you are thinking of taking up a loan secured against your home. If you don’t keep up the payments it could lead to you losing your house. A loan could also mean you having to pay out for a longer period of time which means more interest and more debt.This could lead you into more difficulty and debt in the long run.

 

 Seek independent professional advice to help you decide what action to take. Contact a local advice agency like the Citizens Advice Bureau or National Debtline on 0808 808 4000 for more help (this is a free service). Through these channels they can help you with a free debt management plan which means all the money you can afford to pay goes towards paying back your debt without them charging fees. Be very cautious before entering into a debt management plan which does charge you for sorting out your debt.

 

The opinions expressed are those of the author only. The material is for general information only and does not constitute legal, financial or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation by an FSA authorised company where the market is FSA regulated.