Help is out there! (Debt Help in General)

Member Name: hypno06

Product:	Debt Help in General
Date:	05/08/09 (95 review reads)
Rating:

Advantages: The relief once you take control is amazing.

Disadvantages: It won't happen overnight.

Over the last twenty years or so, having a credit card (or two) and a loan (or two) has become the norm. Before that, borrowing criteria was stricter, and the banks were not so eager to lend cash, whether for general spending, or for house purchases.

With the ease of obtaining credit, whether by using catalogues, applying online for credit cards, or accepting one of the many "guaranteed offers" that came through the letter box from the bank, many people have built up balances that just a few years ago would have been unthinkable. Add to this the fact that many credit card providers have automatically increased customers' limits without request, and you can see how the balances get bigger.

Now, of course, I am not saying that the customer is blameless here - no one makes anyone accept credit, no one makes you sign on the dotted line, and sometimes the temptation of easy credit is just too much to refuse when you could do with a new car, a holiday, or just fancy a bit of extra money to get by on.

For some people it is simply a case of borrowing money, often at high rates of interest, that they simply cannot afford to repay. Perhaps this is money that should never have been lent in the first place, and probably wouldn't have been lent under the criteria of 20 year ago.

For others, they may find that following a loss of a job, a long term illness or disability, or the loss of a partner, for example, their income no longer easily meets their repayments.

For some, who have been moving their debt from 0% card to 0% card to take advantage of low rates of repayment, they may find that when the 0% period runs out, there is no new offer to take advantage of, so they suddenly have to find far more money to service the debt than they previously had to.

Whatever the circumstances, or the reason behind it, when debt becomes unmanagable, it can take over your life. Worry about finding money each month to pay the minimum payments invades your sleep, robbing Peter to Pay Paul using one credit card to pay another's monthly payment, panicking when the postman comes or the phone rings - it is an incredibly stressful thing to have happen to you......but there is help available - starting with yourself.

**First things first**

You may be avoiding the post, the bank statements, the phone calls, but until you face up to things, you won't be able to deal with them effectively. Grab yourself a cup of tea/coffee/glass of something stronger and a pad of paper and a pen.

Then get all the paperwork you have been avoiding, open it, and write everything down - who you owe, what you owe, how much you need to pay and when. If you are in arrears, write down how many months you are behind. If you are close to finishing a loan, write down when it will be done and how much money you will free up.

Then start writing down everything, and I mean everything, that you have coming in, and going out. Wages, benefits, maintenance payments, utility bills, cigarettes, school trips, weekly lottery tickets - it all needs to be added into the equation.

**Be honest**

It might be difficult at first, but you will have to be honest with yourself. There is no point in trying to do this exercise, which is hard enough as it is, if you avoid the fact that you are spending £80 a month on ciggies, or if you conveniently forget that you spend the best part of £5 a day on a sandwich because you didn't make a packed lunch to take to work.

It might not be much fun, but unless you are honest about your situation, you cannot tackle it. You also won't be able to see what you can easily cut down if you don't actually acknowledge it in the first place!

**Understand it**

If you are in debt, there is a reason why. For everyone it is a different reason. Is it because you lived beyond your means (be honest, remember!), is it because you were trying to keep up with your peers in buying the latest car etc. Is it because spending helps you "feel better", albeit temporarily, until you need the next shopping "hit". Perhaps you are addicted to ebay, want to spoil your children with the things you never had as a child, feel as though you deserve a holiday twice a year.......

Is it because you started working part time after starting a family, but didn't change your spending habits to match your new reduced income?

Do you constantly set budgets but never manage to stick to them?

In order for you to make the necessary changes, you need to understand why it is you are in this predicament. Remember to be honest here. It might take a lot of soul searching, and could be pretty emotional as you face up to realities, but once you have done so, you can start addressing your reasons, taking control, and moving on.

**The initial shock**

Quite often, the real figures are a shock, as you discover just how much you owe, just how much short your income is, when compared with your expenditure, just how much you need to find JUST to cover your minimum payments. You may be horrified at just how much you have spent on ebay in the last 6 months, or on cosmetics that remain unwrapped in the bedside cabinet.

Be prepared for this shock - it is all part of the process.

**Seek help from those who can give it**

Now, I know we are surrounded by "debt help" adverts on daytime televsion, and on the internet, but these are almost certainly going to be companies that might offer you "free advice" but certainly won't offer you "free help". They might be looking to sell you a consolidation loan, or a debt management plan whereby they take a monthly fee. Please, please, please stay away from these people.

Instead, use one of the debt charities, such as Consumer Credit Counselling Service (CCCS) or National Debtline. Both these can be accessed online, giving a huge amount of help and information on all your options, from a debt management plan through to bankruptcy. Website addresses will be at the end of this review.

The CAB also have specially trained debt counsellors. Again, the service is free and impartial. If you want to see a CAB counsellor, please make sure you ask for their debt-trained people, as regular counsellors will not have the information and specialist knowledge you require.

**don't be put off**

I am sure you are aware that debt is more of a problem now, than it has ever been. Therefore there are more people ever than before seeking help. This means that you may have to wait to see someone - don't despair, book yourself an appointment and be proud of the fact that you have taken the first step to gaining complete control.

Also, if you don't agree with what one debt counsellor says, you can speak to another one. Sometimes, for example if bankruptcy is recommended as a realistic option, this may not be something you are comfortable with. Speak to another counsellor/charity and see if they have a workable alternative for you.

Just remember - don't go to one of the fee-paying organisations.

**Just one low monthly payment......**

Ads offer consolidation loans all the time. These may initially appeal, as you can bundle all your debts into one, and make one low, affordable monthly payment. They rarely do the trick, though, as unless the initial reasons for getting into debt have been addressed (see above!), the spending will continue, the credit card limits will be maxed out again as you treat yourself to that well deserved holiday/handbag/night out with the lads and you will end up not only with maxed out cards, but with the loan as well......

**Don't bottle it up**

The old saying "a problem shared is a problem halved" is very true here. Many people have kept their debt worries to themselves, not even telling their partners. Shame, guilt, uselessness......all feelings that many experience as they try and battle things alone because they feel as though they have done something wrong.

Although it may not be easy telling those closest to you, and there may be fireworks, sulks, and genuine bewilderment as they thought you were completely in control of things, if you can work through a situation with someone - friend, colleague, partner, parent.....it will be much easier. Just for the fact that you can ask someone to run through figures with you, give ideas on what you can cut back on etc. Two heads are better than one.

Whilst you may not want to shout about your situation to all and sundry, it is very difficult to carry on making excuses as to why you can't join your work mates for a drink after work, or why you can't contribute to the latest leaving collection/lottery syndicate. Sometimes, simply saying "I'm cutting back on what I am spending right now" or "things are just a bit tight this month" can take the pressure off you - and I would hazard a guess that some of those around you are in similar situations and will actually be relieved that someone else mentions it first!

**Cyberspace**

MotleyFool and Moneysavingexpert are two of the websites that offer online forums for support and ideas. Whether or not you have been able to tell those around you, why not go online and check out for yourself that there are others in your situation, and there are solutions and ways forward.

**Take control*

From the moment that you open those unopened bills, you are taking control. That is a very powerful thing to be doing. Every step you take, is a step closer to being sorted. That is something to be proud of.

If you need to contact your creditors to offer reduced payments, you will be able to get template letters from the National Debtline website. Don't allow yourself to be bullied into paying more than you can genuinely afford. Take a deep breath, and stick to your guns. If it ever went to court, the court would take into account your necessary expenses, and provided you have been honest, will only make you repay what you can afford to pay....nothing more, so the creditors wouldn't get any more than you are offering anyway.

**What is the worst that will happen**

Martin Lewis of moneysavingexpert fame says that there is not a debt situation that cannot be resolved. OK, it may be that Bankruptcy or reposession is involved, but even that is not the end of the world. Whilst these things should never be taken lightly, if you retain you mental wealth, does it really matter if you have had to surrender your bricks and mortar? Not a situation anyone wants to find themselves in, I know, but ask yourself, truly, being honest.....what is the worst that can happen?

Compare that "worst case scenario" with the sleepless nights you are currently experiencing, the extreme stress you are under........now, which will you choose?

**It won't go away overnight**

The chances are you didn't accumulate this debt overnight so it won't go away overnight.

See it as a diet - you didn't wake up one morning to find yourself 3 stone overweight - it crept up bit by bit. That means, that you won't start weightwatchers tomorrow and find that by the end of the week you are 3 stone lighter. You will lose a lb or 2 a week, sometimes putting on a lb but over a period of time, you will steadily lose weight.

What you WILL have done at that first weightwatchers meeting, is made the decision that you are going to do something about it - you take control of your eating habits.

Debt reduction is like weight reduction - you face up to it, address your eating/spending habits, take control, and take the necessary steps towards getting where you want to be. It might take a while, but then Rome wasn't built in a day.

**What not to do**

Don't ignore letters and phone calls - they won't go away, and if a court sees that you have made no attempt to solve the problem, they will be less sympathetic to you.

Don't consolidate - it rarely works, depsite the promises from the ads.

Don't go to a fee paying company - there are freebies out there that will do the same job for you, without taking your money.

Don't expect it to be sorted overnight.....it takes time, but you will get there.

Don't be afraid or ashamed. You are not the first to be in this situation and you will not be the last.

Don't bottle it up - that only increases your stress. If you can't open up in real life, open up online in one of the specialist forums for support.

Don't give up - it is a long struggle at times, and you may have a blip from time to time (like a dieter having the odd binge) but as long as you keep looking forward, and stay realistic, you will get there.

**Do**

Take control - that feeling is immense when you realise you are taking control, rather than your debt taking control of you.

Be honest - you can't solve the problem if you don't admit what it is you are solving.

Be proud of every step you take. You are making valuable changes to your life here.

Ask for help - it is out there - take advantage of it.

www.cccs.co.uk 0800 138 1111 Opening times: M-F 8am-8pm

www.nationaldebtline.co.uk 0808 808 4000 Opening times: M-F 9am-9pm, Sa 9.30am-1pm

Citizens Advice Bureaux - www.adviceguide.org.uk

Christians against Poverty - www.capuk.org

Summary: There is no debt problem that can't be solved......