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How to Get Over Debt

Let’s face it. Living in the UK is expensive. People sink into debt every day. Add the possibility of unforeseen circumstances, such as loss of unemployment, divorce or loss of a loved one and many find themselves behind on payments.
Having unpaid bills is stressful and is a burden. There can be constant phone calls and letters demanding payment. Life can feel out of control. But help is waiting for you in the form of good advice, useful tools and professional debt companies. They can help you get over your debt.

Even more importantly they can help you break the cycle of debt by stopping you from adding extra debt.
Are you behind on card and loan repayments? Are you using new debt to pay off old debt? Well, then you’re headed for a debt spiral that will put you worse off.

Move in the right direction by removing unnecessary forms of credit. Start with a quick check of your online credit file, using one of the companies that offer free trials. When you peruse your credit report you will see all the cards and loans that you have open, i.e. phone contracts, store cards, payday loans, credit cards and direct debits.

Are there accounts that you rarely use? Do you have extra lines of credit open? Then close these accounts and lines of credit.

This simplifies your finances and helps you avoid over-spending.

Also, don’t avoid the groups/companies that you owe money. This can lead to extra fees, more collection phone calls and more debt collection letters through your letterbox. Instead, contact them.

The good news is that credit providers and utility companies deal with late repayments every day. Most, by regulation, are required to show some restraint when the customer has approached them/explained their situation.

If you forewarn them of your situation and that you may not be able to make the next payment, it is possible they may delay your collection date or allow you to take a repayment holiday. Given enough notice and depending on the company, they may offer an arrangement or pay plan where you may repay in smaller instalments and over a longer period of time thus allowing you to get your finances in order.

Budgeting is Key

Make a list with all your current earnings and expenses, including bills, food, accommodation and entertainment. Look for ways to reduce your outgoings. For instance are you paying more than necessary to your utility provider? Do you buy luxury groceries you don’t need? Change providers. Stop shopping at luxury stores. You could save hundreds every month. This is yet another tool in the fight to slowly bring your debt under control.

Another debt management tool – Balance Transfer Cards

Do you have several credit cards? There’s a chance you can pass all the debt to a balance transfer card. Look for providers with special offers. They may give you a zero percent credit card, making all your credit card debt much more affordable. This is possibly the cheapest form of borrowing. These can be available long term and even work for people with bad credit.

Is your social life making you overspend?

An often overlooked cause of bad debt is who you spend your time with. Social crowds can influence how you spend. If your friends enjoy expensive restaurants and plush holidays, they can put you in debt and keep you there. So, if you are trying to get your debt in check, surround yourself with people on a similar budget. This will reduce the pressure you might feel to overspend.

Let debt management groups help you.

Companies such as StepChange and National Debt Line can help you. These groups will contact any and all of the companies that you owe money to and inform them that you are working with them. Their actions freeze interest payments and halt harassing phone calls and collection letters. Another term for this type of debt management is a ‘debt consolidation loan.’ It combines your various debts into one debt. Debt consolidators then work out a schedule of repayments.

To accomplish this, your income goes to the debt management company. The company will then calculate your income and expenses such as travel, food, entertainment, accommodation and utilities. Then over the months and years (depending on the debt), they pay off your debts. This way you will not be in charge of paying each debt owed. The debt management company does this for you, leaving enough money for your basic monthly expenses. If you choose to work with a debt management company they usually will charge a monthly fee to manage your debt. But there are debt charities that will do the same without charging a fee.

Speak with a professional debt advisor

For free and impartial advice, you can speak to one of the many debt related charities that have been set up to help people in your situation. The debt advisors we recommend include: