It doesn’t take much, does it? To go from perfectly managing your finances to suddenly being completely overwhelmed and struggling to even make your regular payments. Don’t worry, many people have been there, myself included, and there are solutions. Here are a few options to help you with debt management.
Debt management isn’t a one size fits all problem, some people might owe a few £100’s and have limited help options whereas other’s might owe a few £100,000 with multiple solutions. The first thing you need to do is identify that you have a problem with your debt, take a step back to see how serious it is and then make a plan about how you can deal with it.
Don’t forget that you can contact multiple organisations to help talk about your debt, many of these are free.
Once you know how big a debt you’re dealing with you can look at your options for getting it sorted. I’ve listed a few ways below.
Ask A Friend Or Family Member
If you’re looking at a smaller amount of money, in the hundreds or low thousands, you could approach a trusted family member to see if they’d be willing to help you out. One thing I will say is that you need to be completely trusted by this person and make sure you pay them back when you promised to.
Borrowing money like this can lead to even more problems if repayments aren’t met, including the person you borrowed from no longer wanting to associate with you.
Consider A Consolidation Loan
Many lenders can offer their customers a consolidation loan, allowing you to pay back multiple creditors at the same time, closing your accounts with them and then repaying the lender one (often smaller) amount. You need to remember, like all loans, a consolidation loan will come with interest so you’ll repay more than you borrow but more often than not, this amount is less than you’d have repaid to your creditors.
You will need to have a good credit score to be considered for a loan, so if you’ve defaulted with the creditors you owe to then you might not be able to go for this option.
Debt Management Plans
If you’re really struggling each month and cannot look at a loan then it might be worth getting in touch with a debt management company. A debt management company will look at your income and outgoings then tailor a repayment plan that’s affordable to you. They will then contact your creditors, request that interest is frozen and make them an offer of repayment on your behalf.
This repayment plan can take years, depending on the size of your debts, and you’ll have to do an annual review so your situation can be reassessed with wage rises and bill increases.
Debt management companies come in all shapes and sizes so make sure you read all the information they provide and if in doubt ask them questions. Some will charge you for their services. You can find out more here.
Do It Yourself
If you have the time, and the patience, you can sit down and work out your own budget, how much you can afford to repay and when then write to your creditors to offer them a revised payment plan. They will ask for copies of your budget and may ask for information about your other debts.
This can be a long process but worth it to know you’ve sorted it all by yourself.
Whichever option you decide to choose, make sure you’ve done your research and weighed up all your options. If you’re in any doubt then make sure you contact a registered debt advisory service and they’ll be happy to go through your options with you.
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