This question is becoming more and more common and for many people there is no easy answer. In many cases, the answer is staring them in the face, but, of course, they just don’t realise it. It’s a difficult decision when you can’t pay your bills. You feel like you’ve let people down, that you’re a burden on society and that life won’t get better. It’s easy to stick your head in the sand, but I encourage people to avoid this route because it doesn’t work long term. It’s a short term, “If I don’t see it, then it’s not happening”. Well, it may seem harsh, but WAKE UP. It’s here. In the envelope. On your door mat. It has your name on it. The total balance inside can’t go down until you deal with it. SO DO IT TODAY!
I’ve been there and I have there’s only one path out.
Step 1: Understand your finances – what can you afford to pay towards your debts each month? If the answer is £0 i.e. you have a negative disposable income each month, then that’s still good. You’ve made progress! Remember to include:
- Rent/ Mortgage
- Council tax
- Child care cost
- Running the car
- Home Insurance/life insurance
Don’t include the payments you make to the following:
- Credit cards
- Personnel loans
- Pay day loans
- Store cards
Step 2: Is the problem long or short term? If it’s short term move to step 3. If it’s long term, then you need to seek professional advice from a charity. They will help you decide which route will be best for you. It may be that bankruptcy is best because it will be a long term problem.
Step 3: Taking the next step
Once you have looked at the whole situation work out what you can afford to pay towards your debt each month. If this does not reach the contractual payments that the credit companies are asking for then you can negotiate with them. Ask if they would freeze interest and charges for a set period of time and ask if they would accept a lower amount until you get the situation under control. Most companies will say yes.
If for some reason your credit company will not freeze interest and charges to help you then it is imperative that you seek free debt advice as soon as possible and there may be better options out there that you are unaware off.
Am I Getting the Benefits I’m Entitled To?
You may be missing out on benefits that you are entitled to or it may be that you are suitable for a debt solution either way the longer you put it off the harder your situation can become. A debt advisor can ensure you are receiving all of the benefits which you are entitled to.
When seeking debt advice always look for a debt free charity. The charity advisor will need to be aware of your circumstances before offering any advice, so they will want to know your income, expenditure and who you owe money to. They will also want to be aware of any assets you might have i.e. property or vehicle. It is only once they have gained this information that they will be able to advise you correctly on how best to become debt free.
The correct answer varies from person to person as it very much depends on your own individual circumstances. If nothing else, you will have a definitive list of the options available to you.
Once you have been give the advice it is entirely up to you what you do.