According to The Money Charity, the average household debt recorded in July 2020 was a staggering £60,403. With 12.8 million people in the UK having no savings, or savings for less than £1500 it’s clear that many of us are in debt to a certain extent. But what happens if debt starts to become unmanageable?
The first step to dealing with debt is actually facing it
Burying your head in the sand, ignoring letters, the phone or door for fear of it being someone wanting money will most definitely affect your health the longer you carry on.
Ignoring debt will not make it go away; the reality really is the opposite. Lenders add interest and non-payment fees continually, making your debt grow. It’s essential therefore, to not sit struggling alone. Once you acknowledge your debt and engage help, you will feel the benefit immediately.
So what can you do?
Make a list of all your bills, income and debts with the minimum payments that each ask for. Having it written down will help stop it whirring round your head and knowing the actual figures will help you see where you can make cutbacks. This could help you see whether there is spare money to contribute to your debts.
If you’re struggling, you should seek professional advice from a debt counselling service such as Stepchange Debt Charity or Citizens Advice. Debt charities will not judge you. Their expertise and experience will help you with advice tailored specifically for you to manage your debt and take control.
Debt advisers will prioritise your debts and expenses and will assist with an income and expenditure assessment. They set realistic budgets for you to ensure that you have money allocated to meet your welfare needs such as food and hygiene products as part of your monthly budget and advise you on the next steps you should take. They will also check that you are receiving any benefit help that you are entitled to.
Talk About Your Debt
This is a daunting task to face alone, consider confiding in a friend or family member about the issues you are facing, a problem shared really can be a problem halved. Perhaps, they can make the initial phone call to the debt advisory group to get you started. Once the first step is taken, you will quickly see that there are answers. Their expertise and experience will ensure that you receive assistance and help you to feel confident to deal with your debt. Taking control will certainly benefit your health, relieve anxiety and take some of the worry burden away.
Contact Your Debtors
Contacting the companies involved is always better than in ignoring them. Debt advisory services will offer you the help and support to do so. If you are uncomfortable on the phone, then take advantage of emailing or letters to approach those needed. Depending on your budget assessment, you may be advised to ask lenders for a freeze in interest and charges. They could offer a payment that you can afford. Lenders are often considerate and may be prepared to accept a lesser regular payment while you are reassessing your finances.
Look after yourself
You have done the hard part, now it is time to look after your own wellbeing. Where possible, look to tackle the root cause of any overspending and seek professional help if necessary. Make sure that you eat well, sleep well and take the help offered to get yourself in the best position possible, both mentally and financially.