Worried about debt which you can't have written off?
The credit crunch is forcing more people into debt.The terrible impact of the credit crunch is becoming more obvious. Several stories have been reported about desperate debtors who have committed suicide after failing to see a way out of their financial troubles. And those are just the people we hear about. There may be many other thousands – if not millions – of people who are suffering alone and in silence.
The Samaritans say that the number of calls to their city branches have risen significantly in recent months as even high earners also feel the pinch. The debt charity Credit Action claims the debt problems people call in about are much more serious than they were a year ago. Some callers are in such a state of despair that they have called up to get advice while holding a loaded gun in their hands.
Unless you’re on the frontline, like these charities, it’s all too easy to read statistics like “repossessions by mortgage lenders are up 48% in the last year” or “applications by homeowners for insolvency increased by 17% in 2008”, and not see the thousands of personal, human tragedies they involve.
Anyone can fall into debt. The question is, at what point does it become a serious problem? The key warning sign that you are at risk of falling into serious debt problems is the discovery that you are borrowing just to keep on top of your monthly expenses. In other words, you are paying for regular outgoings using credit cards or an overdraft because you are exceeding your income every month.
The moment this starts to happen, it is wise to seek help. Set a budget and stick to it. But what if cutting back is simply not possible? What if the situation is already quite serious, and you are being hassled by creditors or mortgage lenders? What should you do then?
First of all, be careful about who seek help from. Many companies will try to take advantage of you while you are in this desperate situation. For example, some unscrupulous insolvency practitioners may try to convince you to enter into an expensive and unsuitable insolvency agreement. Similarly, if you’re a homeowner who is facing repossession, you may also be offered the chance to sell your home and rent it back. This is an extremely dangerous way to get out of debt.
There are, however, three really good places to go to in order to get help. You can do all three simultaneously – and none of them will cost you anything:
Consult a debt charity such as:-
1. The Consumer Credit Counselling Service will be able to provide practical help as well as free advice. They can speak to your creditors on your behalf and try to negotiate a solution for you, so that you can make affordable payments and still pay off your debt. If you are struggling with your mortgage, for example, they can speak to your lender and ask them whether you can reduce our payments to a more affordable level or take a payment holiday. Most importantly, they will sit down with you and go through everything you owe and explain all the jargon.
2. If you are deeply in debt, you are no doubt under a lot of stress – and it is often this stress which drives people to despair. If you feel depressed, don’t suffer alone. Contact counselling charities Mind or Relate for practical advice on how to deal with the emotional fall-out of debt. Don't ignore it or bury your head in the sand, because inevitably this will only make the situation worse.
3. Find a debt forum on line and ask for support from other people who have been through the same thing.
It's not easy to face up to debt, and sadly there's no magic button you can press to make it go away. But there is always an answer to any debt problem and that answer should never be suicide. So hang on in there. And remember, you're not alone. Debt charities can help you and most importantly of course, you can help yourself. Just don't give up hope! |
