Debt is unavoidable but controlling debt can be almost impossible. Financial education is much needed in our schools so that people actually understand money and how to manage it.
Getting into debt does not mean that you have badly managed your money, sometimes it does though. In these situations it is important to be aware of the sources of your debt and the amount owed. This may increase faster than you can repay it due to high interest rates.
If your debt is out of control first take a deep breathe. Don’t panic. Organise your paperwork and bills and using a spreadsheet or pen & paper calculate what you owe and the rate of interest. If this is too much at least collect your paperwork before seeking further help. A family member or friend may be able to help or your local Citizens Advice Bureau will definitely be able to help.
The longer you leave it the worse it will get. It is always fixable in time.
The first point of contact for any debt advice should be the Citizens Advice Bureau. They have specially trained staff that know exactly where you stand legally and between them have years of experience in helping people for free. They will go through your circumstances and advise you on your options.
There are other companies that are advertised to help you with your debt however make sure they are independent and not just offering one solution to your debt (e.g. IVA) as they will be giving biased advice.
Secondly, you then need to contact your creditors to make arrangements to repay based on the debt advice given to you. In terms of whom to contact first my Mum always told me that you should always pay your rent or mortgage first as you need to make sure you have a roof over your head. You can then work backwards from there in terms of the biggest consequences if you don’t keep up with full payments.
Following this you can try and see if you can bring in some extra income to help speed up the repayments. I would not use these in my original calculations but as a bonus to help get out of debt quicker.
One of the most important steps in getting debt solutions and getting out of debt and turning your situation around is admitting fault and asking for debt help to recover your situation and get your life back on track.
Getting into debt can lead to depression and other mental health problems, as well as relationship difficulties. It can be like a kind of realisation to start the process of taking a pro active approach to getting out of debt. Although it can be a long slow process it can make your situation more positive.
When debt solution is sought from the relevant people you will find other people to talk, learn not to make the same mistakes, and develop coping strategies for the future. It will also improve close relationships as you get the support needed.
Therefore always a worthwhile step provided you ask around and make sure you go to the relevant people who can offer the right advice and just as important the right support. Which may have to come from different sources. The sooner you take that deep breath and start speaking to the right people the easier it will become.
Need debt help? Try getting in touch with the national debt help line or visit your local citizens advice, their advice will prove invaluable and they will suggest simple things you will go away thinking; why didn’t I think of that!
Contact your creditors before your debts get really out of hand and ask to speak to someone in there own debt solution department, explain you are having trouble and are trying desperately to get out of, often all creditors need to continual contact and payment gestures to be sure you are not simply ignoring them.
Finally consider a debt consolidation loan, yes it is another loan and yes you may be paying it for a longer period of time, but at least with just one payment to think of each month you will know where you stand.
If however you think you can get together enough money to part pay your debts, look into offering an IVA to all or part of your debts, most companies accept and although it does go on your credit file it won’t destroy it like bankruptcy does.
I am a student in my first year, 2nd semester and the only thing I hate about university is the money! I anticipated the expenses during college and got a job as a waiter/barman at a local hotel. I managed to save about a grand before I started university; I also applied for tuition and a maintenance loan. The maintenance loan was there to cover my rent, not to spend on general life and going out. I spent most of my savings before Christmas and the rest on gifts, and therefore I was left with no money. Also, my first instalment of loan was not sufficient for my rent, and therefore I had to get a cash loan to pay for the rest. It makes me sick inside to think that I’ve been at university almost a year and have already chalked up a debt of six grand, not to mention overdraft problems. I think that my debt problems are affecting my health.
So, in the short term, the loan is good as it covers your rent, or perhaps your living costs if you’re parents are helpful and pay your rent. However in the long term, after a three year course and a debt of almost £20000, it seems that the financial side creates a huge argument against studying at university. I would recommend without a doubt getting a job whilst at university, even a couple of days a week can fund all of your living and some of your rent, which is VERY useful. For most, university is not an option without a student loan, so almost all students have one, however expect to be paying them off for a very long time. This is why a job at the same time is definitely a necessity.