Debt worries

When you're unfortunate enough to find yourself in unmanageable debt*, you’ll find a lot of worries and problems confront you on a daily basis. These quite often get in the way when it comes to finding a solution. The most important thing is to get help (preferably from a regulated free debt advice organisation), but once you do there are some things that it's probably best not to worry about, at least for the moment. Here’s my 5 recommendations in no particular order. You can also visit the Money Advice Hub pages listed at the bottom of this blog for related advice.

1. Shouty Creditors

You’re in debt and you owe money to several companies. You’re likely to be getting calls asking for money on a daily basis, some of these calls can be quite demanding and stressful. But there is a reason for this, creditors want their money back. But not all debt is equal so those lower down the list have to try harder to get a return whereas the higher priority creditors don’t necessarily need to shout.  So it can quite often be that those who shout loudest are the very ones that should be taking up less of your hard earned income. The important thing is to get advice, and consider paying debt in some sort of prioritised order. Note: I’m not suggesting that you stop paying your debts without first thinking about how this will affect your credit rating and additional interest and charges that may be incurred. But where you can’t meet you commitments you should work out a fair plan that’s not going to leave you in greater peril.

2. Credit Ratings

Another thing I kept getting told when I couldn’t pay my debts was that my Credit rating would be affected. Ironically this concerned me for a while, until I realised that I couldn’t afford to pay my bills, therefore my credit rating was going to be affected whatever I did, and for a justified reason. I just was not a good prospect to lend to at that point. The thing is though, the last thing you want when you have problem debt is more debt, so leave concerns about credit ratings until you’re out of debt. It can and will be re-built once you’re out the other side.

3. Amount of Debt

I also fixated on the sheer scale of my debt for a while. I worked it out in comparison to my income to what I could buy with that amount of money, with how much I had wasted, and so on. The thing is if you can’t meet your repayments it really doesn’t matter by how much. Once you've cut your expenditure down as much as possible and you still can’t meet your bills you have a problem and you need to resolve it one way or another.  The size of debt is important as it may affect what options you have for resolving it, but the point is, like credit ratings, you just have to accept it for what it is. Don’t obsess over the cause or scale of debt, it’s just another fact that helps determine a solution.

4. Other People

In my experience good friends and family are overwhelmingly supportive, and whilst some might not understand, opening up is a relief. Yet debt is almost always hidden, and this just adds to the personal burden.  It may not be comfortable talking about your finances, but you shouldn’t feel you need to hide away because of it. Not having enough money to do something is hard, but it shouldn’t be harder than necessary because you have to hide the reasons why you can’t do something. Open up to those you can trust and you’ll feel the burden lift with every conversation.

5.The Future

You're in Debt, you have no spare money, and the future may look bleak, but by getting help you are ensuring that you're doing everything you can to make it as bright as possible. This is the way you should look at, no one knows what the future holds.  You’ll have tough decisions to make about personal budgets, about which path to take and potentially about your lifestyle. It will be hard to know how it will all play out. Just take the best decision you can based on your current situation and the future is one step closer, with each step, it gets clearer and hopefully more positive.

* I’ve mentioned problem debt several times in this blog post. What I mean by this is that Debt that you can’t resolve on your own. Debt that, once you have cut your expenditure as much as feasible, you still can’t meet your contractual repayments,  or that you can’t see how you’re ever going to pay it all off.

Money Advice Hub Further Reading

Common Credit Debt

Credit Debt Collection

Ignoring Debts

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