What’s the worst thing you can do when you’re in debt?
Around 8.8 million people in the UK have problems with debt, but only 17% look for help (according to the Money Advice Service).
Instinct suggests it’s best to hide debt or any other problems from the people around you.
But why hide a problem when you can get support from the people around you? Or even unlikely sources such as the lenders themselves?
Here’s our guide to the 6 people you need to turn to for support when dealing with debt.
- 1. First things first
- 2. Stay close
- 3. How can debt advice services help?
- 4. Is your employer worth considering?
- 5. Can lenders and creditors do anything for you?
- 6. There’s support everywhere
When in debt, the first step is to admit to yourself you need help. Avoiding personal finance problems will only make them worse.
If you’re really serious about paying off your debt you have to be honest with yourself.
Start by working out how much you owe and don’t leave anything out.
Work out your income and expenditure and prioritise the payments of your debts starting with the longest overdue or the ones that are building up interest.
It’s important to give full details about your financial situation to both creditors and the person from whom you’re receiving advice in order to get the best support for your situation.
Debt isn’t just a financial issue; it interferes with all the daily aspects of your life and can cause anxiety, stress and mental health issues for you and your family.
According to research by Payplan.com 42% of people in debt don’t feel comfortable talking about their problems with even their closest family or friends.
But don’t be afraid or embarrassed to tell your friends and family about the problems you’re having. This way you’re more likely to find help with dealing with your debt.
Keeping debt a secret can also create a lot of stress and pressure so be honest with those around you.
Your family might be able to help by lending money or even provide much needed emotional support to get you though this tough time.
Ask someone close to you that you trust to sit down with you and go through all your incomings and outgoings and help you put a plan in place.
If you’re one of those people who can’t bear the thought of having to talk through your debt, then outline everything you want to say and ask someone to speak to someone close to you on your behalf.
These services are completely free:
We STRONGLY advise you to use them.
But if you choose to pay (as many do) make sure you use a debt management firm that is a member of a trade association, such as ClearDebt or The Debt Counsellors Charitable Trust.
But even if you think it will be quicker and easier to use a company, remember that the debt charities offer FREE advice and help you to organise a debt management plan – all for nothing. Here are a few below…
- Citizens Advice Bureaux (CAB), provide free, confidential and independent advice from thousands of locations in the UK
- StepChange Debt Charity, a charity offering online debt remedy service and free debt advice
- Themoneycharity.org.uk, a national money education charity
- Christians Against Poverty a national, free debt advice service that runs through local churches.
- Nationaldebtline.co.uk – the website has some useful sample letters for writing to creditors and a free phone numbers
- Payplan.com – free debt management company that make repayment arrangements
We at Moneymagpie also offer lots of free advice to help you organise your finances and start making a dent in those debts.
There is no legal requirement to discuss your debt issues with your employer (unless it is demanded in your written contract of employment) says Andrew Smith, External Affairs Director at the trading body Debt Resolution Forum. However if this is causing you issues at work you may find it helpful to do so and most companies will be supportive of your situation.
Mandy Rutter, psychologist at wellbeing specialists Validium says, “Employers have a ‘duty of care’ to their staff. Almost half of the working population (47% or 13.79 million people) has access to an Employee Assistance Programme, services run independently from the organisation that offers advice and support by telephone and sometimes face-to-face.”
They’ll help you deal with the practicalities of the debt issues – or pass you to a specialist.
They won’t take the debt away but they will give you short and long term plans to manage the debt – so that the fears, stigma and stress of your debt is in control. You feel in control of your debt, rather than it being in control of you.
If you’re still struggling to make your repayments, the worst thing you can do is stick your head in the sand.
Rather than hiding away from your debts, phone everyone you owe money to and explain your situation.
By getting in touch with your creditors at an early stage, you can give them an opportunity to help that might not be there in future.
If you’re one of those people who can’t bear the thought of having to talk through your debt then sit down with a friend and outline everything you want to say then they can speak to someone for you.
Providing you have serious debts the CAB or StepChange Debt Charity will also speak with your creditors on your behalf.
Believe it or not, most lenders don’t want to see you in debt. Reclaiming property and possessions is really costly, as is going through the courts – so most creditors will use these options as very last resorts.
But if your creditors don’t know you’re having financial difficulties, they’ll assume you don’t want to pay and start taking action against you. This is why it’s so important to get in touch with them.
We know dealing with debt can be tough but we are here to help lift your spirit and hopefully your bank balance too.
There is light at the end of the debt tunnel and it comes in the form of our free MoneyMagpie Debt Action Plan emails .
Not only will this plan ease your anxiety about debt but it will also make sure you know where to look for the best help and support.
For weekly, free support, handy hints and a practical guide to dealing with debt management, sign up to our free MoneyMagpie Debt Action Plan emails here.
Over to you: Have you had experience with debt and come out the other side? Share you experience in the comments below to help others and show them there is a light at the end of the dark tunnel.