Debt can be a daunting thing. A lot of people don’t like to talk about debt because it feels almost “taboo”. Many will try to ignore it in the hopes that it will just go away, but in reality, it spirals out of control.
In January 2020, it was reported that almost 27 million of the UK adult population were in debt, with almost 5 million of those admitting that their debt was over £10,000.
Whilst in December 2020, it was reported that people in the UK owed over £1,696.4 billion due to people being on furlough therefore increasing the need to borrow and apply for credit cards and loans.
So, what should you do if you are in debt?
Firstly, don’t panic. Admittedly, that is easier said than done, but panicking will only make you feel worse. Organisation is key and knowing exactly how much you owe and to whom will make these next steps a lot easier.
It is always advisable to avoid quick money lending schemes, often referred to as “payday loans”. The majority of these “payday loans” will offer you an amount of money in an instant, and they advertise that there are “no hidden fees”, however often fail to mention, for example, that the loan is calculated at a very high % APR (some over 1000%!).
The next step, and possibly the most important, is do not ignore demands. The worst thing that you can do when you are in debt is ignore letters, phone calls, or any other correspondence relating to outstanding debt(s). A little bit of communication can go a long way. Speak to the company who you owe monies to, advise them of your situation and if you are not able to pay the full amount right away, propose a monthly payment.
One other option is to speak to a Debt Management Company. Debt Management Companies will often ask you to complete an income and expenditure form, to work out exactly how much you can afford to pay after your living expenses have been taken care of. The use of a Debt Management Company can often eliminate some of the pressure and worry when it comes to paying debts, as they will liaise with the creditor on your behalf. They may also manage your payments and keep note of both what you have paid and what is still outstanding.
The main thing to remember is that no matter how big the debt, there is always a solution.
Useful Contacts if you are in need of assistance with Debt:
0808 808 4000
Consumer Credit Counselling Service (CCCS)
0800 138 1111
Citizens Advice (Liverpool Office)
0300 023 1231
Community Legal Advice
0845 345 4345