Archive for the ‘Debt management’ Category

Ostrich syndrome – why bad debt can make you want to hide at a time when you most need debt help

Tuesday, November 3rd, 2009

The bills just keep on mounting, you feel hopelessly out of control, creditors are chasing you for payment – at times like these the temptation to adopt an ‘ostrich’ stance against mounting bad debt can seem like a good idea. The last thing you might want to do is to seek debt help and actually deal with the problem. Hide and it’ll all just go away, right? 

Wrong. Hiding from your bad debt will not make it disappear, it’ll make things worse. By not talking to your creditors, by not taking control and responsibility for your debt, and not taking appropriate debt advice, you face angry creditors who are not prepared to listen to your side of the story. Not everyone gets into debt because of a poor grasp of finances; debt is now a common problem for many ordinary people who have been hit hard by misfortune, the recession or perhaps through losing their job. Sticking your head in the sand and hoping that ‘tomorrow it’ll all be different’ is a shortsighted (although understandable) reaction. If you run away from the problem, it’s still there and it’s still a problem that needs to be tackled properly, with a clear debt management strategy. 

Picking up the courage to admit that you have a bad debt problem to a stranger can be incredibly difficult, but by sitting down and looking at your finances with an impartial debt advisor, you are taking back control of the situation. Debt advisors aren’t there to judge you – they’re there to help you. They’re there to guide you through the fiscal landscape to a safe haven that will see you back in control and with your head firmly out of the sand. Being in debt can make you feel like you’re the only person in the world who’s in financial trouble. But you’re not alone, and you needn’t tackle the problem by yourself. If you start talking to creditors, planning your finances and discussing your situation with an advisor, you may even find out that you’re not in as much trouble as you first thought. There are all sorts of options available from IVA debt advice to debt management services that can help you write off debt. The light at the end of the tunnel is not always an oncoming train…

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Posted in Debt advice, Debt management | 9 Comments »

Bankrupt Britain? Why the recession is causing many borrowers to seek help with debt

Tuesday, October 27th, 2009

With record numbers seeking debt help, this recession is unlike any that have gone before it. The financial meltdown brought about by the collapse of Lehman Brothers in the US sent shockwaves around the world. As people started to look more closely at the causes of the crisis, an underlying trend began to emerge. The main culprit? Easy credit.

The boom time of the 90s saw hundreds of thousands of ordinary people gain increasing access to easy credit. Store cards, credit cards, ‘interest free’ loans – the list was endless and specifically designed to attract the ordinary man and woman in the street. As the public began to pile up debts, the banks realised that it was only a matter of time before a tipping point was reached and the unsecured financial loan chickens came home to roost, with many people now seeking ways of managing debt or even ways to write off debt entirely.

While the headlines may optimistically state that we’re now climbing (albeit slowly) out of the recession, it still continues to affect thousands of borrowers hard. We’ve just come out of an era of spend, spend, spend. Savings are practically non-existent, and the collapse of the banking industry has wiped out what little savings many people had. Without that financial cushion to fall back on, debt has continued to mount as people rely on credit cards and other high-interest loans to make ends meet.  No surprise then that IVA companies and other forms of debt management solution are increasingly in demand.

The charity Credit Action has shown that total UK personal debt at the end of July 2009 stood at £1,457bn. Although the increase in this enormous sum of money has slowed recently, it’s still a massive debt that will probably never be repaid in full. The financial forecast is still decidedly chilly for average consumers and while we may not be actually bankrupt as a nation yet, unless the wheels of industry start to move again across the world, it is still a spectre on the horizon. However, if you’re looking for debt help there is good news in the shape of the national debt helpline and other debt counselling services – they can offer independent debt advice and strategies for dealing with your debt.

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Posted in Debt advice, Debt management | 2 Comments »

A cry for debt help – what to do when you realise your debt is out of control

Friday, October 23rd, 2009

Admitting that your debts are out of control can seem like an admission of failure. But in fact, seeking professional debt advice is actually the first step on the road to regaining control and bringing your finances back into line. It’s not going to be an easy journey and everyone’s experience will be different, but there are things you can do to rectify what initially seems like a hopeless situation.

The first thing to do once you’ve admitted that yes, you do need help, is to get that help. Impartial debt advisors are there to work with you to find options, work out financial plans and help you to get your finances back on track. They will talk you through not only what measures you can take to stop the bailiffs knocking at the door (including unsecured debt consolidation and IVA debt advice) but also your rights as a consumer.

By opening the lines of communication with your creditors, you are giving yourself far more options and a lot more ‘wriggle room’ to get things back on an even keel. By contacting your creditors and stating that you intend to work with them to draw up a mutually agreed pay-back arrangement, you are immediately entitled to a 30 day ‘breathing space’ during which your creditors cannot pursue you for repayment. This gives you a chance to consult with a debt counselling service and to draw up a realistic and effective financial plan to start paying back some of the debts.

Tackling out-of-control debt is not something that you can do on your own. Debt advice services have the means, the know-how and the experience to be able to look at your situation and present you with options. With their help, you can regain control of the situation and begin to get your life back in order, keeping you and your creditors happy and avoiding the stigma of bankruptcy.

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Posted in Debt advice, Debt management | No Comments »

Will my credit card company allow me to write off my debt?

Friday, October 16th, 2009

The short answer to this question, an issue that causes many people a great deal of stress and anxiety is “no” – it’s extremely unlikely. Credit card companies are not inclined to write off people’s debt.

One option available if you have debts on multiple high interest credit cards is to consolidate them on to one at the most competitive rate, even 0% if possible. This is perfectly achievable as a way of staunching the high interest payments.

A more serious option, and one that can be used as a more comprehensive debt management solution especially if you are in serious amount of debt and owe more than £15,000, is an IVA. An Individual Voluntary Arrangement is a legally binding agreement through which you are able to clear all your debts over a period of time (usually sixty months).

Your IVA provider will discuss with you how much you can afford in monthly repayments. The provider will then negotiate with your creditors to get them to write off part of your debts leaving an amount for you to pay off at the rate of the agreed monthly repayments.

Your creditors, including the credit card companies will of course have to first agree with your provider to write off the rest of your debts. As long as your provider presents a realistic repayment schedule it is likely that they will agree.

More serious still is bankruptcy, though this is regarded as a last option as there are a number of implications. You may lose your home, credit may be hard to come by in the future and you will even find yourself ineligible for some occupations.

The best advice as ever with debt matters is to seek independent and impartial advice, ideally from a non-profit debt resolution company who can offer you input specific to your individual circumstances.

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Posted in Bankruptcy, Debt advice, Debt management | 7 Comments »

Five Easy Steps to Clear Debt.

Wednesday, October 14th, 2009
  1. The first step is to recognise that you are in trouble; you have completed that as you are reading this blog. You are on your way to clear debt.
  2. Cut up your credit cards and store cards. This can be the hardest step for the majority of people as these cards are viewed as their safety net, but always remember this is probably what has got you in debt in the first place, be brave.
  3. Cut down on spending, work out what you need per day as a necessity, set yourself a daily budget and stick to it. Cut down on eating out, buying clothes etc. Avoid places that may encourage you to slip up.
  4. Inform your nearest and dearest of your situation, a problem shared is a problem halved, they should encourage you to keep on track, you are less likely to go back to your old ways if you are feeling watched.
  5. If you are in serious debt problems, you should get Debt Help; there are debt charities with professional advisers who can point you in the right direction to becoming debt free. There are different options available for you such as a debt consolidation loan, an IVA or maybe just support.

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Posted in Debt advice, Debt management | 2 Comments »

Five essential strategies for debt management

Thursday, October 8th, 2009

Getting into debt can happen for a whole variety of reasons: ill health, redundancy, relationship breakdowns, the list is endless. What’s important though is that you face up to the situation and acknowledge that the debt or debts are for real, that they won’t disappear of their own accord and need resolving. From this position of financial reality you can start to address the problems, deal with them and start to regain control over your finances.

Here are five essential strategies for debt management that will help you at least get to grips with the situation and offer you a chance of tacking it.

  1. Understand your debt.
    How much do you owe and to whom do you owe it? Take stock and list all you owe and where. Hard as it this might be, actualising what you owe will make tackling it much easier in the long run.
  2. Talk to your creditors and make manageable repayment arrangements. 
    Ask for improved terms as part of your debt management. You never know what you will be able to negotiate and even a small saving helps.
  3. Understand your outgoings.
    Make a note of everything you are committed to spending over a month. Use this information to identify where the money is earmarked. Once you identify what is essential you can cut out the non-essentials.
  4. Prioritise your debt.
    It’s likely some of your debt will be costing you more than other aspects of your debt – credit cards, for example, are one of the most expensive forms of debt. Identify the most expensive debt and deal with it as a priority.
  5. Cut up your credit cards and cut out the mindless spending.
    Credit cards are too tempting and too expensive. Yes a non credit card existence is less convenient, but convenience costs. You’re already in debt – don’t add to it.

Talk to an independent and impartial debt advice agency today, for more information on how to take back control of your finances.

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Posted in Debt management | 3 Comments »