Help with Debt Problems – Dealing with Debt

Help with Debt Problems – Dealing with Debt

If you are in debt and finding it difficult to cope with it is important to deal with the problem straight

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Help with your Debt Problems

away. Help with debt problems is available for everyone, don’t ignore it.

The longer you ignore your debts the worse the situation will become as debts don’t just ‘go away’.

The basic steps to help you deal with your debt problems

Step 1 is to make a list of everything you owe money to

You need to sort out exactly what you owe and who you owe it to. These people you owe money to are known as your creditors and as you owe them money you are known as a debtor.

Step 2 is to put your debts into an order of importance

These most important debts are known as your ‘priority debts’ and they aren’t always the largest debts or the oldest ones. Priority debts are ones where serious action can be taken against you if you don’t pay up what you owe.

For example:

  • You could lose your home
  • Be disconnected from a service
  • Go to prison

A priority debt usually includes things like:

  • your mortgage repayments
  • a secured loans
  • your rent
  • your Council Tax
  • your utility bills
  • outstanding taxes
  • or court fines

You will need to sort out the payment of your priority debts first if possible.

Your non-priority debts could include things like:

  • credit card and store card payments
  • bank loans
  • overdrafts
  • home-collected credit (door step loans)
  • catalogue repayments
  • any money you’ve borrowed from family or friends

Whilst you must not ignore these debts you don’t need to deal with them as your first priority.

Step 3 is to work out your personal budget

Sit down and work out a weekly or monthly budget to see what your income and expenses are, it may also show you where you can possibly save money. Working to a budget will help you decide what you can actually afford to repay to your creditors so it’s important to be realistic and take this part seriously. You will find many debt companies offer this as a FREE service. You should take them up on it if you are not sure how to do it.

Step 4 is to get professional advice on the different ways to deal with your debts

There are many options for dealing with debts (listed above on this site). An arrangement to pay is one you can make with your creditors or more formal ones that debt specialist company can organise for you. There are usually some costs involved and conditions you have to agree to when you use a debt company but they will handle ALL of the dealings and make your life easier from day one.

Step 5 is to talk to your creditors

If you are not using a professional debt management company then once you know what you can afford to repay call your creditors about your situation and what you’re going to do about it.

Be realistic about what you can afford to repay and don’t assume you’ll be able to pay back more in the future. It’s important to follow up a phone call with a letter confirming what has been agreed. Many times people are too optimistic about their future affordability. Also don’t be pushed into agreeing too large a repayment. The key here is AFFORDABILITY.

Step 6 is then to keep to your budget and keep to your repayment plan

Now you have either a personal agreement with your creditors or one arranged through a debt planner you need to stick to it. If your circumstances change drastically (better or worse) then let them know. If you can afford more it is better to pay it, likewise if you are struggling too much discuss this with them also.

 

Professional Help with Debt Problems

Most Debt Management firms will do all of this for you and not charge you a fee up front but take it from the repayments you make. For example: you make be contracted to make a monthly payment of £350 but can only afford £175. A debt planning company will arrange this for you and get paid from a portion of the first few months payments. This way you are making an affordable repayment each month from day one and the company is getting paid for their services without asking directly for a fee from you. Help with your debt problems can be free, or s good as…