Do you avoid checking your mailing box, thinking it might have another haunting letter from your creditor? Do you spend nights awake, or do you wake up huffing and puffing in the middle of the night due to foreboding? These are telltale signs that you have sunk into an abyss of debt. Debts quickly add up if you fall behind on payments, and they can take a toll on your physical and mental health.
Help is always out there, but the time you choose to seek help is paramount. If advice is not sought at the time, you will end up with a nasty taste in your mouth. Lenders may provide you with a couple of options after perusing your current financial condition to help ease off the pressure of debt, but only when you keep them in the loop about your problems before making a default.
However, there is no guarantee that the proposed plans will do you any good. Therefore, it is vital to take the following steps when you are struggling to keep up with payments:
- Identify your current situation
First off, you need to take stock of your current situation. Not until you know how much debt you owe and how much money you have to pay off will you be able to come up with a repayment plan.
Unfortunately, sometimes you might not have savings to fall back on when an emergency crops up, you may have begun receiving calls from lenders and credit card companies, or you may have used one credit card to pay off another. Take the help of the debt management company. It is likely that they come up with a solution to bail you out.
- Avoid talking about debts at night
When debt starts to seem like a problem, you should immediately nip it in the bud. It will help you save a lot of money in the long run. Discuss things with your significant other or other family members if they can help you come up with a plan. However, you should avoid discussing debt at dinner or just before going to bed. This will make you anxious, and you will have a problem to slumber.
During the discussion, we found the cause of racking up debt.
- Is it due to a lack of savings that causes you to keep taking out bad credit loans in the UK?
- Are you heavily reliant on credit cards to make purchases?
- Are you on a low income?
Once you have identified the cause, you can quickly come up with a plan to take the bull by the horns.
- Do not ignore calls
The fear of tackling insurmountable debt sucks. When your account is sent to the collection agency, you will start receiving phone calls, text messages and emails. You may want to bury your head in the sand, but remember that the problem is real, and it will continue to persist unless you clear the dues.
So, instead of avoiding answering phone calls, you should respond to them. Discussing your financial situation with them will help you get out of debt as quickly as possible. If you do not turn to messages from collection agencies, you will be taken to court, and then a county court judgment will be issued against you. At that time, you will have no choice other than to pay off the debt as per the instructions of the court.
- Make a repayment plan
You cannot expect anyone to come forward to help you when debt has become hard to pay off. Before it is too late, you should start figuring a way out. Grab the bank statement for the previous three months and see how much is coming in and how much is going out. Ideally, your income should be more than your expenses to stay afloat.
Because you are already struggling to keep your head above water, figure out how you can trim down your expenses. Here are some common ways to do it:
- You should whittle down your discretionary expenses. Until you get on the track, you should stick to a bare-bone budget.
- You should stop impulsive purchases if it has got in your way.
- Use cash for all your transactions so you know how much you have already spent.
- Figure out if the debt avalanche or debt snowball method will work to your advantage.
- Increase your income sources if needed.
- Avoid taking out more short-term loans unless you have cleared all dues.
If you are on a debt repayment plan, make sure that you pay more than the minimum amount. Otherwise, interest will keep accruing on the unpaid balance. Remember that emergencies can catch you off guard at any time. So, even if debt settlement is your priority, you should never skip contributing to an emergency cushion. Having a safety net is vital to tide over when cash is tight.
- Make small moves
You should think of how you can release money to pay off your debt. Many a little makes a mickle, so start with small adjustments. For instance, cancel out subscriptions, use generic products rather than brands, buy from local or thrift stores, shop only when you need and the like. These small moves will help you be in control and, as a result, you will manage to sleep well at night.
- Do not drown your sorrows
Many people turn to alcohol to avoid problems, but that is not a good way to deal with debts. You should rather push the envelope to have enough money to keep making payments. Not taking responsibility towards debts will only add to your problems.
To sum up
When debts have piled up to the extent that you are spending sleepless nights, alarm bells should be raised. The consequences can be worse if you do not knuckle down. Analyse what you can do, talk to your lender if they can offer you any sort of help, or take advice from experts.
If your debts have been handed to collection agencies, do not run away from answering their calls and messages. You should rather check what you can do to keep afloat.
Source: theguestblogs.com
