Other Ways of Dealing With Debt
The worst thing you can do is nothing at all. The ‘head in the sand’ approach simply doesn’t work. In general your creditors are approachable and, at least in the short term, are open to your suggestions and offers.
Self Help
You may be able to make an informal arrangement with your creditors yourself. By constructing a budget planner to show your income and expenditure you can show how much you can afford to pay towards your debt. Divide this amount fairly (based on how much you owe each) amongst your creditors and put this offer in writing.
If you explain the reasons for your financial problems in the letter this should be accepted by your creditors and may buy you some time. You should remember however that in the long term it will not help to clear your debt (in fact your debt will probably rise due to charges / interest) and will not stop them from calling and making demands.
Citizens Advice Bureau & CCCS
As Charities the Citizens Advice Bureau (CAB) and Consumer Credit Counselling Service (CCCS) offer debt advice you can trust. They can help you deal with your creditors and assist with Bankruptcy applications. Whilst they perform a vital role they are often inundated with enquires and you may have to wait for an appointment. As such (particularly if you are interested in Debt Management Plans and IVA’s) it could be quicker to give us a call as we aim to offer a genuine alternative and can point you in the right direction straight away.
Token Payments
If you just can’t afford to make the payments your creditors are requesting then you can offer them ‘token payments’. This can be as little as £1 a month if you can show this all you can afford and should (although they will not be too happy) be accepted by your creditors. A token payment shows your willingness to pay and is based on the principal ‘you can’t pay what you haven’t got’. Again this may buy you some time and if you end up in court the judge will usually view your efforts favourably. This is not a long term solution to debt however.
Budget Planner
With so many bills and creditors to pay it’s easy to lose track and get behind. Whilst the budget planner below may not cover every cost you have it should be a good starting point to managing your money better.
The budget planner will indicate how much of a debt problem you have and is similar to those used by debt management companies to work out how much you can afford to pay your creditors. If you have a negative figure at the then end then you really need to consider making cut backs and trying to increase your income, our advisors can offer help with this.
