If you are struggling with debt don’t ignore your problems because they won’t just go away. The first thing you should always do is talk to your creditor(s) to see if they can offer a way to help you. They may agree to lower monthly payments until you get back on your feet or even to freeze interest. Creditors will sometimes accept as little as £1 per month, provided you can prove that you can’t afford any more.

If you have a sum of cash that isn’t as large as you owe they may accept this as a full and final settlement for the amount outstanding. It isn’t uncommon for creditors to accept payment of 40 - 66% of the total debt. If you have the cash, this should be seriously considered.

You must prioritise your debts first as these are the ones that will result in imprisonment, losing your home or both. Although all debts are important, secured debt, rent, council tax and utility bills are the ones you must pay first.

Non priority debts include unsecured loans, bank overdrafts and catalogue arrears. These can be dealt with differently so it would be advisable to consult a debt counselling company to decide which option is best for you. There are a number of viable debt solutions, including an Individual Voluntary Arrangement (IVA) or debt management plan.

This entry was posted on Thursday, May 29th, 2008 at 11:45 pm and is filed under Loans. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.