10 ways to deal with debt

 If you are suffering debt problems, you must face them head on. There are plenty of debt specialist companies who can help you and many Government run charity organisations who can give you free debt help and advice.  Ten ways to deal with debt include:

1. Don´t bury your head in the sand

Make contact with your lender as soon as possible if you think you may miss a payment. Explain your situation and ask your lender to arrange a reduced payment plan or a payment holiday if you are struggling financially. Reply to all creditor´s letters and respond to all phone calls. This way, if your case comes to court, the judge is likely to be more sympathetic to your case. Also keep copies of all correspondence.

2. Always prioritise debts

Pay your priority debts first. Always tackle those first which threaten your home, including electricity, gas and mortgage, plus any council tax arrears which can result in a court appearance.

3.  Work out a household budget

 Draw up a budget by listing your income and expenditure each month and completely review your spending. Use comparison websites to switch to cheaper deals for utilities and cut back wherever you can. If you have savings, consider paying off your debts with these, which will save you money. Credit card debts have much higher interest rates than most savings plans, so you can reduce your debt immediately by using savings to pay it off.

4. Beware the plastic devil
 
 Always pay more than the minimum on your credit card as, even by paying 1% more you can nearly halve the repayment time. Paying back the minimum only will mean you are paying off your debts for years to come and the only people benefiting are the banks.

5.  Seek free independent advice

Seek free independent debt advice from the Consumer Credit Counselling Service, Credit Action, the National Debt Helpline or a regulated debt specialist company in the UK.

 6. Don´t borrow more money

Never borrow more money to clear off existing debts. Seek the help of a debt help company who can explain the different debt options and debt solutions to you, so you can be clear of debt in a set period of time without borrowing more cash.

7. The dangers of debt consolidation

Consolidating your debts can be more trouble than it´s worth. Debt consolidation loans can work out more expensive than negotiating a reduced payment plan with your creditors so consider all your options carefully before you apply for a loan.

8. Only use regulated debt management companies

If you are looking for professional debt advice and help, only use debt companies which are regulated in the UK. Specialist companies can help you pay off your debts and explain the different debt options available to you.

 9. Bankruptcy and IVAs
 
 Bankruptcy and Individual Voluntary Arrangements are serious, but both provide solutions for people in serious debt. Neither should be seen as an easy way out, but if your debts have spiralled out of control they may be viable options. Debt management plans can also be arranged by a qualified debt counsellor, which will allow you to pay off your creditors with affordable payments.

10.  A problem shared is a problem halved

If you are suffering debt problems, speak to family and friends about it.  They could have useful help and advice which will help you sort out your problems. Failing that, contact a professional debt help company who can help you reduce your debts immediately, so you can look forward to a debt-free future.