Debt Advice

We all have debt at one point in our lives, most of which is manageable. But where do you draw the line? When does debt become so bad that you need help out of it?

Well, if you are wallowing in debt today and wondering how to get out, your journey to freedom begins here; call Debt Advice contact number 0800 043 4050.

Now, let us look at the basic steps towards a debt free life.

First, backtrack to what caused the debts.

  • Get a clear picture of all your debts – check out the demand letters to know how much you owe to each creditor and when it is due. This exercise helps you to prioritize your debts
  • If you do not know how to handle the debt, consider employing the services of a debt adviser
  • Write “holding letter” to creditors asking for more time to get yourself together. You will realize that most creditors are quite reasonable when you clearly explain your situation to them and show the steps you are taking towards rectifying the situation
  • Start claiming any government benefits  and tax credits you may be entitled to. This increases your income and allows you to take a breather as you plan your next step

Engaging a Debt Adviser

A debt adviser is anyone who can help you deal with your debt effectively. When in debt, chances are that you wouldn’t even afford to pay a professional. You can call Debt Advice contact number 0800 043 4050 to get started. In the meantime, here are countless equally good debt advisers who are also free!

Organizations that can offer free debt advice
Business Debtline for the self-employed; advice is given via telephone
Citizens Advice and Customer Service where you can either call a professional and get help or request a home visit
Debt Advice Foundation is a telephone support service where you can get advice on how to set up a debt management plan and stick to it
National Debtline has an email and telephone support service. You can also get a free self-help information pack with a personalized action plan
Payplan is a telephone support service that helps you set up and follow through a debt management plan
Shelter provides advice on housing issued; how to manage housing debt and avoid homelessness (repossession/eviction)
Stepchange Debt Charity is a telephone support service. It also has an online debt management tool that gives you an actionable personal plan

There are countless organizations that offer professional, easily actionable debt advice. Here is a list of other free debt advice organizations.

Debt Consolidation

Debt consolidation refers to merging all or most of your debts into one loan to make repayment easier. This is one of the most popular debt management options.

Debt consolidation is only great if;

  • The overall amount you are required to pay is the same as what you have been paying
  • You end up paying lower interest on the debts
  • You can afford the final repayment amount

If you do decide to consolidate your debts, you have two options

  • A secured loan – it has a high interest rate and goes over a long period of time. This loan is secured by your home (or any other property). The downside is that your home is at risk
  • A personal loan has lower interests. However, since it is unsecured, the rates will heavily depend on the lender. The good thing is that your home is not at risk

Loans are more affordable than other credit options such as overdrafts and credit cards. The loans give you a lower interest rate, and a longer repayment time which reduces the repayment installments. You can call Debt Advice contact number 0800 043 4050 for more information on debt consolidation options.

If you can still make repayments, albeit in smaller amounts, talk to your creditors and agree on new repayment terms. This also applies if you are not able to make repayments for a short while but will resume once a financial situation has been sorted out.

Knowing Your Priority Debts

Debts are not the same; some are more important than others and failure to repay could have serious consequences. For starters, if you fail to make the required mortgage repayments, you could lose your home, or if you fail to pay your gas and lights bill, they will be cut off.

Now, when thinking of a sound repayment plan, there are bills that must always be repaid on time. If you do not have enough money to meet the required amount, negotiate for more affordable amounts but make sure you make a payment.

Priority bills are

  • Secured loans and mortgages
  • Rent
  • Electricity and gas
  • Council tax
  • Unpaid fines
  • TV license and telephone (if you rely on them)
  • Water

Non priority bills are

  • Credit card debt
  • Catalogue debt
  • Personal unsecured loans
  • Money borrowed from family and friends

What If You Cannot Repay At All

If you find yourself in a tight spot where you cannot be able to make even a single repayment, don’t panic. There are still a few options that you can explore. For starters, you can reschedule or freeze repayments until you are able to repay.

There are other formal debt repayment options that you can consider. These are;

  • Administration order
  • Debt relief order
  • Filing for bankruptcy
  • Individual voluntary arrangement

Here is the deal; if you go with any of these formal debt-repayment options, it will appear on your credit record. As such, you may have a harder time in future when you need credit services. However, if you have explored all other options to no avail, any of these options can give you a fresh start. But before you make any choice formal, talk to your debt adviser. You can call Debt Advice contact number 0800 043 4050 for more information on whether to consider formal options.

Dealing With Potential Consequences of Unpaid Debt

Failure to repay debts on time attracts consequences. Therefore, the moment you hit a snug financially, you need to be prepared for the consequences, even though they may not come to pass.

Bailiffs

These professionals will take your possessions, sell and pay themselves with the proceeds until the debt is cleared. Bailiffs take luxury items such as cars, game consoles, TVs etc. but are not legally allowed to take essentials such as fridge and clothes.

Court Action

You creditor may take you to court after sending you warning letters. Once you get a warning letter, be sure to respond to it before it escalates to a court action. Court proceedings can be quite costly so avoid it as much as you can.

Energy Disconnections

Failure to pay energy bills within 28 days of receiving notification risks a disconnection. Before disconnection, however, you should be served with a warning letter. If you are having financial difficulties, you can talk to your supplier on a renegotiated payment plan until you get back on your feet. If you are of pensionable age, your energy will not be cut off between 1st of October and 31st of March.

Before It All Gets Out Of Hand

Have you notices any financial difficulties that may, in the long run, turn into spiraling debt? Are you now in debt and wondering how to manage it? Well, call Debt Advice contact number 0800 043 4050 today. With proper advice and actionable personalized plans, you will be out of debt in no time!