If you’re struggling to pay off your debts and having problem meeting your monthly bills there is free, independent help available. The first step to getting out of debt and back on track to being in the black is looking at your finances to find out where you stand. Here we’ve listed the steps to follow to get out of debt.
Don’t panic - there is always a way out of debt
When you’re in debt it can sometimes seem impossible to be able to pay it off and get back on track but whatever situation you’re in there is help available.
The first step to getting out of debt is to ask for help, whether this is talking to a partner or a friend, or by approaching a charity or an organisation.
There are lots of options and the sooner you look at your situation and address what’s happening, the sooner you’ll be on your way to being out of debt.
Seek free, independent help
There are a number of free and independent debt charities and organisations which can help you if you’re in debt.
These are non-profit organisations and they can provide free debt counselling to you to help you, whatever your situation.
These companies can also work with you to create a free debt management plan. This will involve looking at all the debt you owe and working with you and your lenders to find a monthly sum you can afford to repay - without getting into more debt.
They can also speak to lenders on your behalf and negotiate interest holidays and lower repayment amounts.
If you’re being hassled by debt collectors, which can be extremely intimidating and stressful, they can stop debt collectors contacting you. If you’re seeking help through a non-profit firm like those mentioned below, debt collectors aren’t allowed to contact you for 30 day-periods.
This breathing space period is designed to give you a little respite to sort out your repayments.
There are a number of companies providing these services including StepChange (0800 138 1111), The National Debtline (0808 808 4000), Christians Against Poverty (01274 760720), and Citizens Advice (0344 411 1444).
You should never EVER have to pay for these services so if for any reason the company is asking you to pay - or telling you it will take a cut from the money you’re paying back, alarm bells should be ringing.
There are a number of companies operating which charge for these services but they are to be avoided at all costs. The last thing you want is to give your money to one of these firms when it should all be going on repaying the debt.
Budget and cut back
Being on top of your financial situation is key to making sure you’re working your way out of debt and not getting into more debt.
The first thing to do is make a monthly budget of everything going in and out of your bank account. This includes all your monthly bills such as for your gas and electricity, mortgage or rent, broadband and TV, childcare costs and phone bills.
You also need to make a list of all your outstanding debts, along with the interest rate you’re paying, the outstanding balance, and how much you’re currently paying back.
Once you have these details you will have a clearer picture of your money and can see if there are any areas where you might be able to cut back. This can include cutting out subscriptions you’re paying for which aren’t essential such as magazine or music streaming subscriptions.
You may also be able to cut back on your bills by switching. If you’ve not switched in a while you can save by switching companies, so it’s worth checking if you have any savings to make and if you’re paying the right amount for all your bills.