"The sooner you face any debt problem, the easier it
will be to solve it"
The sooner you face any debt problem, the easier it will
be to solve it. Don't ignore it and hope it will go away.
If you do, you could end up in court, lose the goods you've
bought or find it difficult to get credit in future. You
might even lose your home. Even if you aren't up to your
neck in debt, it's surprising how quickly it can build up
and how long it takes to pay back.
Work out exactly how much you owe, who you owe it to and
what you can pay back. This will help sort things out in
your mind, and help your creditors to see where you stand.
Contact the creditor(s) as soon as possible to explain the
problem and try to come to some agreement about repayments.
Your debt won't be written off but you might be able to
pay it back in smaller payments over a longer period of
time. This will probably cost you more in interest payments
in the long term but may be more manageable now. Follow
a five point action plan:
(1) How much do you owe? List your debts. Work out when
payments fall. Identify the priority debts.
(2) How much do you earn? Work out how much money you have
coming in. Are you claiming all the benefits you are entitled
to?
(3) Are you paying too much tax? What do you spend? List
your essential and less essential spending. Compare it with
your incomings. What do you have left over to offer to creditors?
(4) Nothing left over? Are there any areas in which you
can cut down your spending?
(5) Is there any way in which you could earn extra money?
Talk to your creditors. Send them a financial statement
showing your income and outgoings. Explain your offer to
pay off your debt.
(Source :
http://www.oft.gov.uk)
