Getting into debt

Being in debt: it’s not a pleasant thought, is it?  If you’re in debt, then you probably know it’s important to deal with it as soon as you can.  If you’re reading this to find out more about debt management, then you’re already taking steps that could help.

It’s easy to identify some debts – things like your rent or mortgage, credit cards, or personal loans, unpaid bills, outstanding catalogue and store card payments or your overdraft.  It’s sometimes easy to spend money, but it’s not always easy to stay on top of how much money you owe.  And the longer you ignore debt, as you know, the more of a problem it becomes.

That’s why, if you do have debts, it’s important to spend some time looking at your personal finances and putting a debt management plan into place.

This could be something as simple as working out a monthly budget to include repayments, cutting back on the luxuries in your life, or finding different ways to spend your money.  Or it could involve debt consolidation – a type of loan used to pay off all your individual smaller debts and roll them into one so you pay you debt off to one company over a longer period of time.

The most important thing is to be honest with yourself about the debts you have, and get some expert advice on how to pay them off. Your local Citizen’s Advice Bureau (CAB) or www.nationaldebtline.co.uk are good places to start.

Questions you might like to ask your bank or the CAB

  • Do I have to pay you a fee to help me with my debts?
  • How long will my debt management plan last, and is this realistic?
  • If I consolidate my debts, will it affect my credit rating?