Are You In Debt?


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Getting help with debt
 
Debt can be both exhausting and stressful. If you are feeling the burden of debt, don’t despair. Charitable organisations such as the Consumer Credit Counselling Service (CCCS) offer free help and advice with your debts. Remember, debt help is something you should never have to pay for.

Not all debt solutions work

There are many different options for addressing your debts - some are more reliable than others. You should be wary of the following:

* Using your home to secure your debts - it might appear to help in the short term but if you continue to struggle with your money it could lead to you being homeless.

* Consolidating your debts - putting all your debts together into one bigger loan might seem like an easy solution, but you may have to pay more interest over a longer period of time. That’s why we strongly advise against it - there are other, more suitable options available.

* Debt management companies that charge for their services. Many debt management companies charge high fees for setting you up with debt management plans (DMPs), when DMPs are available for free through charities like CCCS. If you are already feeling the pinch financially, paying for services that are otherwise free doesn’t make much sense.

Skills for money management

The simplest way to prevent yourself from getting any further into debt is to develop good money-management skills and habits. It’s never too late to learn some simple steps to improve your skills, which include:

* Putting a stop on unnecessary spending: create a budget and work out ways to balance your outgoings with your income.

* Spend your money wisely: get good at finding cheaper alternatives to the things that you cannot do without, make sure you get the best value for your money and know how to spot a bargain.

* Improve your income: get a second job or work overtime. Apply for the benefits and tax credits available to you. If you have a property, get the most out of it by renting a room to a lodger if you have the space.


Other Ways to Resolve your Debt Problem

Being more careful with your money can help, but if you're deeply in debt, and struggling to pay for your food, bills and other necessities each month, you need a more serious solution.

Make sure you consult a debt help charity, such as CCCS, to find the answer that gets you back on track. Some of the structured debt solutions available include:

* Debt Management Plans:  A debt charity like CCCS can intercede with your creditors to set up a Debt Management Plan (DMP). Under the DMP, you will make one monthly payment, which will be divided among your creditors. Beware, there are many debt management companies out there that will take their own fees from your repayments and could cost you an extra £5,000.

* Debt Relief Orders:   A Debt Relief Order (DRO) is intended to give you a temporary respite during which you can focus on improving your finances. If you have less than £15,000 in debt, you may be eligible for a DRO. You must also own no assets worth more than £300 and have no more than £50 left each month after covering necessary expenses. Once you have obtained a DRO, you will have a 12-month period during which your creditors are forbidden to collect on the debts or add interest or extra fees. If, at the end of this period, you have not been able to better your financial status, the debts will be written off.

* Individual Voluntary Arrangement:  An Individual Voluntary Arrangement (IVA) is a legal process for those with unsecured debts of £15,000 or more and is arranged by an insolvency practitioner. If creditors representing at least 75% of your debt agree, you will pay a monthly amount toward your debt for five years. Sometimes a lump sum is paid towards your debt. At the end of this time, your remaining debt is written off.

* Bankruptcy:  If there is no hope of you paying your unsecured debts, and the amount you owe outweighs all your assets, your only option may be to declare bankruptcy. Once you declare yourself bankrupt, your unsecured debts are written off. However, you may have to sell off your assets, your credit rating will be damaged, and you will have restrictions put on your business and financial activities. Bankruptcy should never be considered without expert advice.

Get Help With Your Debt Today

Your debts will get worse the longer you leave them. Interest charges will only continue to pile up, whilst living under debt can affect your health, family life, credit and career. If you are worried about your finances, you must act straight away.

Once you have acknowledged that you have a problem with debt, get free and professional advice from people who can help you, like the debt help charity CCCS. Experienced, professional debt counsellors are on hand to assist you. The sooner you call the sooner you can regain control of your finances.

CCCS Debt Remedy is a free online debt counselling service and is available 24 hours a day. You can get advice from this service that is tailored to your individual circumstances. It will also prepare a personal budget for you.
 
For free debt help as well as more information, visit www.cccs.co.uk.

 

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