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| Golden
Rules to Getting Out of Debt |
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| Shopping
is a constant temptation to some – but it’s
also a leading cause of debt. |
Almost
everyone has some sort of debt, whether it’s the
mortgage, credit cards, an overdraft or loans. And whether
it’s hundreds or thousands of pounds, finding yourself
in debt is both frightening and overwhelming.
Getting into debt is always easier than getting out. Credit
card companies and retailers encourage shoppers to take
out cards with attractive sign-up benefits, and banks
continually offer their customers loans - all involving
repayment at a healthy annual percentage rate. Lenders
have made it far too easy to get into trouble.
Depending on how deep in debt you are, you may feel like
there is no light at the end of the tunnel but rest assured
there is.
People find themselves in financial difficulty for any
number of reasons, such as unemployment, illness, marital
breakdown or other unforeseen circumstances.
Although you cannot do anything about these or past mistakes,
there are things you can do to improve your current situation.
Many people ignore debts when they experience financial
difficulty. Some fear contacting their creditors. They
do not understand the consequences of not paying bills.
Ignoring debts will affect your credit rating. In addition,
creditors may take action against you in an effort to
get payment. Or your bill can be turned over to a debt
collector, your property can be repossessed or you may
be forced into bankruptcy.
If trying to get out of debt seems like trying to run
a race while being tied to the starting line, and no matter
how much energy you put into it you never seem to get
anywhere, it’s time to get some serious help. The
key to solving the financial difficulty is communication.
If you follow these golden rules from the national debt
line, you shouldn’t go far wrong.
Don’t ignore the problem: it won’t go away and
the longer you leave it the worse it gets.
Don’t borrow money to pay off your debts without
thinking carefully: get advice first as this kind of borrowing
could lead to you losing your home.
If you have lost your job, or are off work because of
illness, check whether your payments are covered by payment
protection insurance.
Check you are claiming all the benefits and tax credits
you can.
Get in touch with your creditors straight away and explain
your difficulties.
 Make
sure you tackle your priority debts first - for example,
debts that could mean losing your home or having the gas
or electricity cut off.
Contact everyone you owe money to. If you make arrangements
to pay some creditors but not others, you could run into
difficulties again.
If the first person you speak to is unhelpful, ask to
speak to someone more senior who may be able to agree
to what you want.
Always attend court hearings and take a copy of your personal
budget with you. Don’t think that going to the County
Court makes you a criminal; it isn’t that type of
court. You won’t go to prison and there’s no
jury.
Always keep copies of any letters or court forms you send
or receive.
National Debtline is a national telephone helpline for
people with debt problems in England, Scotland and Wales.
The service is free, confidential and independent. Phone
0808 8084000 for advice.
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