Taking control of your debt

Taking control of your debt

You may be experiencing some levels of stress if you have financial worries resulting from debts and struggling to manage your monthly outgoings or credit commitments. This could lead to arguments with family and friends, anxiety or even depression.

Here are a few tips on how to help yourself cope with any pressure your debt may be causing you.

Accepting the situation

The first step towards confronting your debt is to accept that it has become a problem which is creating constant worry for you. Debt can build up slowly overtime until a small amount becomes much larger and can suddenly feel too overwhelming for some people, by acknowledging the debt is making you feel like it is out of your control now you can begin to tackle the issue.

Talking about your debt

It is beneficial to talk about your debt worries, by doing this you share the burden which can reduce the stress you are carrying. It can also affect your partner emotionally and financially so it is important to be open about it with them.

Talking to others about your debt problems could result in advice you may not have thought about on your own. You can help your situation by gaining others financial knowledge or perspectives.

If you are unsure about what to do about your current bad credit situation and feel unable to talk to your family and friends about your debt problems there are many charities dedicated to providing free and confidential advice on debt.

If you feel you cannot talk to family or friends about your debt, there are many dedicated charities who are there to give free and confidential advice. They have experience and financial knowledge which could help you improve your current situation.

  • • www.moneyadviceservice.org.uk
    • www.stepchange.org
    • www.nationaldebtline.org
    • www.citizensadvice.org.uk
    • www.debtadvicefoundation.org

Act now

Your problem will be resolved much more quickly if you begin to deal with your debt now by taking these steps:

  • • Get in touch with a debt organisation like the Citizen’s Advice Bureau or StepChange for free impartial advice or any of the above organisations.
    • Stop ignoring bills and start speaking to your creditors to discuss your options.

Regaining your confidence

Once you start to take action with your debt you should start to feel a sense of accomplishment and gain control as you see your situation as something that can be overcome.

Minimizing the stress caused by your debt

Your debt is something that can be overcome and the associated feelings of stress are normal to experience during times of financial worry. You can take a few steps in the meantime to help you relax while you are going through the resolution process.

  • •Eat well. A healthy, balanced diet will help your mind and body function.
    • Exercise. Run around the park, hop on a bike – exercise doesn’t have to be expensive.
    • Sleep. A good diet and regular exercise will help you sleep.
    • Keep it all in perspective. Your debt is a problem that you are dealing with.

Tackle the psychological aspects of debt

If you feel your spending habits may be related to an emotional or psychological need for example over spending to feel good, you can talk to your GP for further advice or even a referral to a counsellor to help you manage these feelings instead of over spending and getting into a cycle of more debt.

Find your path away from debt

Debt is a problem that you can solve. By taking the first steps towards tackling your debt, you will begin to feel less stressed and more in control. As your debt becomes manageable, remember to take care of yourself by eating well and exercising regularly. It may also be necessary to address the emotional or psychological scars of debt – but help is available and don’t try to manage the situation on your own!

How to take control of debt

If you have numerous debts, you may be struggling to know which ones to pay back first. By paying the correct debts first, you are more likely to be able to keep on tops of your debts. By being smart about how you repay the debts, you could also save money and clear your debts quicker than you thought.

Having too many debts at the same time can create confusion in which ones to pay back first. If you work out which are the top debts to prioritise your repayments to you are more likely to keep on top of them all.

The importance of prioritising your debts

There could be higher consequences to not paying certain debts off before others so if you are experiencing trouble paying back all your debts on time you can split them into:

  • •Debt emergencies
    • Priority debts
    • Non-priority debts.

If you’re facing a debt emergency

A debt emergency could be an eviction for mortgage or rent arrear, or even a court action. Seek help in the form of free independent debt advice immediately if you cannot pay these back and let those you owe money to know that you are actively seeking this help.

You can get free debt advice from:

National Debtline – www.mymoneysteps.org

Citizens Advice – www.citizensadvice.org.uk

National Debtline – www.nationaldebtline.org – 0808 808 400

Debt Advice Foundation – www.debtadvicefoundation.org – 0800 622 6151

Alternatively use The Money Advice Service’s search tool where you can search for debt advice services near to you: Click here

Priority debts

Priority debts are ones you should pay off before non-priority debts, they may not even be the largest debts or have the highest interest rate but they could quickly become a debt emergency and may result in:

  • • Losing your home – because you’re not keeping up mortgage or rent payments
    • Being made bankrupt – because you’ve haven’t paid your tax bills
    • Having your heating or lighting cut off – because you haven’t paid your fuel bills
    • Receiving a court summons

If you’re unable to meet all your bills and debt repayments, you should pay these first:

  • • Mortgage, rent and any loans secured against your home
    • Income Tax, National Insurance and VAT
    • Council Tax
    • Gas and electricity bills
    • Child maintenance
    • TV licence
    • Hire purchase agreements, if what you’re buying with them is essential
    • Court fines