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There’s only a few hours left until the end of the year – have you made your New Years resolutions yet? If you spent the most of 2007 worrying about your debt problems, commit to making 2008 the year you get rid of debt!

Resolution 1:
Get debt advice. Talk to a debt counsellor about your finances and see what options you have. Why do you need advice? There are many debt solutions, but the one best for you will depend on your personal situation. A debt counsellor can give you advice based on all the information you give them about your income, expenses, lifestyle and debt.

Resolution 2:
Decide how you are going to get out debt and take action! Whether that be by contacting banks and lenders for a consolidated loan, looking for a debt management plan, talking to an Insolvency Practitioner about an IVA, or visiting your local court for bankruptcy forms.

Resolution 3:
Make a budget (and stick to it!). Don’t let the same debt traps follow you into 2008. Plan out all your incoming payments and expenses and budget your finances. Once you have all your expenses written down, it’s easier to see where all your money is going and where you can make changes – for example, moving into a house with lower rent. Read our advice on increasing your income and reducing your debt for some further advice.

Resolution 4:

So you budgeted for Christmas, did the best to stick to it, and still worried about how you’re going to afford those credit card bills that could hit your letterbox at any day now?

Well, don’t. Worrying about your debt problems isn’t going to solve anything, but taking action will. If your debt was quite small pre-Christmas and you have overspent during the holiday season, you may only need a debt solution like a debt consolidation loan.

How does debt consolidation work?
Consolidated loans work well if you have multiple debts to several creditors and the interest rates are getting out of hand. You should first tally up the total cost of all your debts, then start looking for a loan with a low interest rate that can cover the amount you need. Once you have gotten your consolidated loan approved, you use the money to pay back all your individual debts and concentrate on just paying back the consolidated loan.

How would a debt consolidation benefit me?
The purpose of the loan is to give you a lower interest rate, smaller monthly payments, as well as reduce the amount of stress that comes from paying and negotiating with multiple creditors.

How do I know if consolidation is the best debt solution for me?
Debt consolidation is best suited for smaller debts. If your debt is over £10,000 you may be better off with a Debt Management Plan or IVA (Individual Voluntary Arrangement). If you’d like to get advice on if a consolidated loan will help you become debt free, contact the Debt Advice Trust today.

The Council of Mortgage Lenders (CML) has said that people may want to consider taking out a debt consolidation loan rather than continuing to struggle with debt that has become too high to manage. They warn that house repossessions and mortgage arrears will continue in 2008.

The CML have predicted that the current trend for three month mortgage arrears will increase from 145,000 at the end of 2007 to 170,000 by December 2008. This suggests that more and more people could benefit from debt consolidation to ease the financial burden.

They have also estimated that house repossessions will rise by a further 15,000 by the end of December 2008 which is a 50% increase from 30,000 in 2007. Figures are set to rise to a whopping 45,000 next year. People should take heed of these predictions and seek debt help now.

The majority of borrowers will cope in 2008 but some will struggle with their mortgage repayments. A debt management plan could be the perfect answer to their debt problems.

The CML also predict that there will be a drop in mortgage lending, a rise in house prices and tougher restrictions on lending.

They see good news on the horizon with the Bank of England’s base rate dropping by 5% at the end of 2008.

Since the turn of the century, people have been borrowing beyond their means. As a result, many are struggling with repayments and the number of people who need debt help has increased at an alarming rate.

Debt counselling has helped over 1.4 million people with debt problems during the past year and counsellors are bracing themselves for an even bigger demand for help in 2008.

People have difficulties coping with debt that matches or exceeds their current wage. As the national average annual income is less than £25,000 there is very little left to pay unsecured debt once housing and primary utility bills have been paid.

Who is asking for debt help?

Many seek debt counselling when their overall debt reaches £13,000 and it is not just the poor who are seeking debt help. Even those from the more affluent end of the market are struggling with increasing mortgage and interest rates.

The highest percentage of people who seek debt counselling are women. A minority have even reached the point where they are prepared to kill themselves rather than live with the pressure of accumulating debt. However, after two hours of debt counselling, many realise that their life has not been completely taken over and that there are ways of resolving what could seem like a hopeless situation.

So debt counselling does work?

Debt counselling provides solutions to debt problems and is customized to an individual’s needs. This way, debtors only pay back what they can comfortably afford and they no longer have the worry of having to deal with their creditors.

Debt counselling is a way to discuss financial concerns and find options to reduce debt. This could be in the form of IVA help, debt management or a consolidation loan.

Many people are performing badly in the workplace as worries regarding debt, play on their minds.

Difficulties meeting debt repayments for utility bills, credit cards and personal loans are having a detrimental effect on the health of many employees. With Father Christmas waiting for us to fill his sack with goodies, the situation is likely to become even worse.

Debt and the Workplace

These days, employees are more likely to take time off work for matters relating to stress. At work, they will feel below par and may even turn to criminal activity in a desperate measure to meet the demands of their creditors.

When people are facing extreme debt and possible bankruptcy, outward signs begin to show in their personality such as short tempers, poor relationships with work colleagues and a less focused attitude towards their work.

Independent debt advice can provide a valuable crutch for employees to lean upon and many will benefit from debt consolidation as it can be an ideal way for them to condense outstanding debt into one affordable sum.

Instead of surfing the internet for pleasure or making personal phone calls, employees should use their leisure time to seek out IVA or debt consolidation advice. Many feel that bankruptcy is an only option and become even more desperate. However, there are many other debt solutions available. For those whose monthly expenditure is greater than their income, a debt consolidation loan may be the answer to their prayers.