How can I deal with my debts?
One of the biggest challenges that we can face in life is our relationship with money. An all too common question facing many of us at some point in our lives is: How can I deal with my debt?
It is a real struggle at times to make sure that you have enough to pay for the necessities of life. Let alone have anything left over for funtimes. Let’s be honest, life can throw us all some curveballs… All it takes is an extended period of illness, a major life change such as separation, redundancy and before you know it you are up to your eyeballs in debts that you have no way of repaying.
My experience of dealing with debt.
I ended up in debt following the breakdown of my relationship and subsequent relocation. With no savings, no job and a lot of overheads. I struggled to pay for the basics, let alone the repayments for the small amount of credit I did have. It was awful, I was 24 years old and I had absolutely no idea how to handle the situation. So I just stuck my head in the sand and avoided the letters. Now, from my experience I can certainly tell you that this is most definitely not the best way of dealing with this situation!
Eventually I had bailiffs knocking at the door and I had no option but to face up to it and start taking some action. I’m not sure why I didn’t straight away. I think it was just all too overwhelming for me at the time, I figured I’d wait until things calmed down, that I’d soon get a job and then I could sort it all out. That was a really big mistake to make.
Once I started to make contact with my creditors it was easily and quickly resolvable. But doing that can be incredibly daunting and creditors aren’t always sympathetic or helpful, and can push you to commit to paying more than you can afford…
Where do I start?
In answer to this question; I suggest that you start with CAPP: Communicate, Account, Plan and Pay
The minute you start struggling financially contact your creditors and explain that you can’t afford the repayments at the current level. This opens up communication between you which is essential, it will also stop the letters and phone calls.
Create an overview of your current finances. Include: income, housing costs, essential bills, food, clothing, credit repayments, amounts owed. You need to include every single cost you have and account for any costs that might occur. This will give you all the information you need as a realistic starting point to help you to create a debt management plan.
Get in touch with a debt management charity.
Debt Advice Foundation https://www.debtadvicefoundation.org and Step Change https://www.stepchange.org/ are brilliant. They will provide you with FREE advice and tools to help you work out what your current situation really is and if there is any money left to pay creditors. If there is any money to pay the creditors they will work out how much you can afford and who gets what based on how big each debt is and set you up with a debt management plan (DMP).
When you set up your DMP you will also set up a direct debit to the charity you have set the DMP up through. They will then manage all of the payments and correspondence for you, and you can keep track of your plan using their online tools.
Once it’s all set up it is a huge weight off your shoulders. DMP’s are updated on an annual basis or sooner if necessary, the advisors are sympathetic and knowledgeable and will do their utmost to help you get yourself straight, and back on your feet again avoiding IVA’s and Bankruptcy. A DMP can be totally lifechanging.
Please, Please, Please Do not let Debt Cloud Your Life, Life is Too Short, Too Precious to Lose to Worry. There ARE Solutions!
Eileen @yourmoneysorted has some great advice in her blog post ‘How to budget like a pro in 5 quick & easy steps’. But it’s fair to say her blog is a treasure trove of advice and support for getting your finances under control.
Another great source of information and inspiration is MoneySavingExpert
Also EmmaDrew.Info is an amazing blog that shares heaps of money making and money saving tips.