| Managing your debt - practical advice
By Melissa Field Coping with mounting debt can lead to depression, worry and fear. Here iVillagers explain how they manage their debts and show that help is out there If you're in debt either go to the Citizens Advice Bureau or the Consumer Credit Counselling Service. I believe they are a registered charity so they won't charge for their service.
The sooner you go, the better because a counsellor from the CCCS will help you write a letter to your creditors explaining your situation and help you to work out a new debt repayment plan.
Go to a charity called Payplan. They can help people in debt negotiate with their creditors and they are funded by the credit industry so you don't have to pay for their services. If you own property you could look at remortgaging and/or extending the term of your loan to clear your debt or reduce your monthly outgoings.
If your property has risen more than 30 per cent in value over the last 18 months you could remortgage and borrow what you owe to pay it off. For more advice see an independent mortgage advisor and see what he/she suggests. A couple of bits of advice when it comes to debt: don't pay anyone to help you deal with your creditors - most of those companies just make mediocre offers to your creditors, which they usually reject.
Your loan and credit card companies will be a lot happier to deal with you directly, even if you are in a lot of debt or have missed payments. Believe it or not, they are not the enemy. If they can help you work out a payment plan, they will, as they would rather get something than nothing. By dealing with them directly, you're showing your true intent to pay and this will count in your favour. However, any payment arrangements you make with them MUST be stuck to in order for you to maintain a good relationship with your creditors. If you keep the lines of communication open, they're more likely to go out on a limb and help you as best they can.
Think long and hard before you go down the consolidation loan route to clear your debt because the majority of people (and I include myself in this) who do this, 'clear' what they owe on their cards with the loan, and then go ahead and run up the cards again because they think they've cleared their card debts rather than merely moved the money they owe elsewhere.
Take out a low-interest loan to pay of ALL your debts. Now CUT UP your credits cards, you don't need them. They're evil. The key to avoiding debt in the future is to understand how you got into debt in the first place. Do you really know where your money goes? I didn't and had to resort to writing a daily spending diary and then combing through my bank statements. It was an eye-opener, I can tell you!
I would get all your financial paperwork together (bank statements etc) and work out ALL your monthly incomings and outgoings. Once you have a clearer picture of your complete financial situation, you can make a decision about how best to clear your debt. Most of all though, don't panic. There is help out there.
If you're in debt, stop the spending now and destroy all those credit cards. Save for what you want in future and don't let anyone put any pressure on you to do otherwise.
A great tip I heard from a financial expert was to literally freeze your credit card in your freezer! Put it in a container of water so that it solidifies with the credit card embedded in it. This will not harm your card, but will prevent you from using it on impulse. If you feel the need to use the card, you must wait for it to defrost first, giving you time to assess the necessity of the impending spend against your debt bills.
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