What to Do if You're in Debt.
Many people get into debts, some are necessary, and some are through a lack of proper financial planning or simply wreckless spending. However, whatever the reason, it is important to take control of your financial circumstances. You don't have to lose sleep over debts that you cannot afford. There are lots of ways of untangling your debt issues without all the additional stress and anxiety. The first thing to do is plan out what you owe in total, what you need to repay each month and who you owe it to, something like this:
| BB Bank | £13000 | £250 per month |
| A Building Society | £1650 | £150 per month |
| EZ Credit Card | £4350 | £250 per month |
| HI Credit Card | £3750 | £180 per month |
| FastnLoose Store Card | £850 | £45 per month |
If you are currently employed, but you are unable to make the repayments, your first step is to contact each creditor and explain that your circumstances have changed and whilst you wish to make the repayments, you need to make some sort of arrangement or agreement with them. Sometimes a creditor will be very understanding; sometimes they will just want repayments and for you to repay any arrears immediately, or soon. Each creditor's collection department has different policies. It is often best to write to each company suggesting your own repayment plan.
If you find that you still cannot make repayments, it is possible that you could get a Debt Consolidation Loan, this will repay the original lenders and you will pay a fixed figure to the Consolidation Loan company over a fixed (usually longer term) period. This will reduce the mounting interest and allow you to repay an affordable amount. The other option is an IVA, an agreement with your creditors to repay them a portion of what was borrowed, after which the rest is written off. Speak to a specialist debt advisor to get more information on these options.
However, there may be some circumstances when it simply will not be possible for you to make any repayments, due to a loss of employment, long-term sickness or redundancy. In this case, speak to an advisor about bankruptcy.