What To Do If Your In Debt

The first thing to do is not panic!. Its never to late to take action and despite the amount you might owe there are ways to stop the letters and get the creditors off your back and gain back some financial independence.

The first thing to do perhaps the hardest part and the most demoralising:-

Taking Stock Of Your Debts

The first thing to do is write down a list of the debts you owe to your creditors. This might seem a scary prospect and don’t worry if you cant remember them all. If you feel brave enough you could always ring your creditors for full and final settlement figures but don’t worry if you would rather not do this.

Prioritsing Your Debts

The next stage is to prioritise your debts. Priority debts are those that can end up having serious consequences if you don’t pay. For instance prison, haivng your home repossesed or having a service discontinued. These might include:-

·         Mortgage Repayments

·         Rent

·         Gas/Electric/Phone

·         Council Tax

·         Water Supply

·         Taxes

·         Court fines

Non priority debts may include store or credit cards, unsecured loans, bank overdraft, catologue or money you have borrowed from family or friends. They may seem harsh to priortise which debts to pay back, but paying back the priority debts means at least you have the basic security in life.

Budget Form

Making a budget form may sound as though your facing a surnmountable task and you may feel this may make you worry even more, but burying your head in the sand is not the way to go and your debts will not go away. Making a list of all your income and expenditure can help you see where you can save money and help you decide exactly what you can afford to pay back and over what type of period. Don’t over exaggerate how much you need,  spending over £1,000 a month on clothes with a 40k debt is not going to impress your creditors but make sure you put in the basic needs for instance food, basic entertainment and clothes.

Talk To Your Creditors

Believe it or not your creditors will be happy to talk to you about how you manage to pay back your debt. This is the time to be honest about how much you owe. This is where the planning stage comes in. Don’t let your creditors make you commit to payments you can’t possibly afford.

Hire A Debt Advisor

Dealing with your debts can seem quite a formidable task and dealing with the taks involved with dealing with creditors, ballifs, letters and county court judgements, can feel quite extreme and make the debtor feel completely lost and out of control.

This is where a debt mananagement specialist can come in. A debt management specialist will be able to handle all communication between you and your creditors and will agree terms with your priority creditors. Be honest with your debt advisor as they on your side, and will require paperwork and information about your creditors to help on your behalf.