Five Effective Ways To Get Help With Debt
Debt has always been a major cause of stress and according to the Consumer Credit Counselling Service ‘perhaps as many as 90% of people in debt feel anxious or depressed‘. When you’re in debt, it can often feel as though there’s no way out, but that’s never the case. It may not be easy, but there is a solution to every kind of debt problem. Here are five tips to help you get started on tackling your debt.
1. Don’t delay facing up to your debts
It is very natural to want to hide your head in the sand over debt, to hope that it the problem will solve itself, that something will come up, or if nothing else, that you can at least delay what feels like it’s going to be the day when your whole life comes crashing down. Perhaps you don’t open your bank statements, or try to avoid adding up the different debts you owe. However, that only makes things worse. The first step to taking action is to admit to yourself there’s a problem. Remember, no debt problem is insurmountable, there will be a light at the end of the tunnel, but you will only see that light if you turn and face it. If you are hiding your debt from your loved ones as well as or rather than yourself, you will need to be honest with them too. But it’s often better not to do so until you have a plan of action for getting out of debt.
2. Make an honest assessment of the situation
Make a full statement of your financial affairs: how much you having coming in, how much you are spending and what on, how big your debts are and how big the minimum repayments are. This can be hard, both emotionally and practically, but it is an essential part of getting out of debt. If you choose to go for debt counselling (see below), you may be able to get some help with making a full statement of affairs, but you will need to provide basic details about how much you earn, how much you spend on the essentials and how big your debt is in order to access counselling. There are several websites that show you how to make a statement of affairs. One of the most popular is Martin Lewis’s Money Saving Expert.
3. Be careful of debt solutions that actually make things worse
If your debts are large or unmanageable, for example if you’re struggling to meet the basic costs of everyday living, then you will probably need to seek expert help. But be careful: not all ‘experts’ are on your side, and not all ‘free’ advice is as free as it seems.
4. Seek advice from real experts
The Money Advice Service website (which was set up by the government to help people get impartial advice about financial matters) lists seven reputable organisations that offer free one-to-one debt help. Two of the biggest and best known are Citizen’s Advice and the Consumer Credit Counselling Service. These organisations give advice and counselling, and in some cases can also talk to your creditors for you to negotiate debt management plans, and in more extreme cases can facilitate Individual Voluntary Arrangements (IVAs) or bankruptcy.
5. Don’t be afraid to take the solution that’s right for you
Bankruptcy can be a frightening word, and for most people with debt problems it’s not necessary as there are a number of other less drastic solutions, too many to detail here: you can find more information from any of the organisations linked too above. However, for those in the most serious debt crisis, bankruptcy can be a way of making a new start, and there is support available to help you through it.
This guide has been compiled by London based finance blogger Paul O’Hara. From working within the finance industry for over a decade, Paul had the opportunity to gain valuable experience in managing debt which he likes to share in online and offline publications.