There’s no way to predict the future. Circumstances change over time, and you might suddenly find yourself in a position where debts you were able to service have become harder to manage.
That’s especially true if you have different debts to different providers, like store cards, credit cards, bank loans, overdrafts. If all your payments are due at different times, and all the debts have different interest rates, you might find yourself juggling when you didn’t have to before.
Here are a few tips that could help you get debt under control:
Look at everything you’ve got coming in, and everything that’s going out again on debt. Make sure you include everything – mortgage payments, power and energy bills, TV licence, and credit card payments.
Then prioritise those payments in terms of penalties for non-payment. For example, if you don’t pay your rent or mortgage, you could lose your home. So that’s usually top of the list. Are there other items lower down you could give up or reduce to make sure you can keep servicing the most important debt?
If you have any savings, for example, could they pay off a store card or buy you an annual TV licence? Then you’ve got one less thing to think about.
Contact your creditors in turn, and try to work out a revised payment arrangement with each. Most will be happy to help if you contact them before you’ve missed payments or got into serious difficulties.
If you could get rid of one or two payments – like a store card or credit card, or clearing and overdraft – it could make all the difference. Make your savings work for you – you can always go back to saving once you’re back in the black.
You know what you earn and what you owe. The rest is your budget. You might need to make some savings to stick to it. Maybe it’s something simple, like changing to a new supermarket or taking your TV package down a notch. Maybe reducing the amount of data you have on your mobile phone contract. However you do it, sticking to a budget helps you bring your finances back under control.
If you’re really struggling, don’t wait for things to sort themselves out – they won’t. Get some expert help sooner rather than later – it could make all the difference. StepChange, the Citizens Advice Bureau or National Debtline all offer independent and confidential debt advice. Or simply speak to your bank. The sooner you approach them, the easier it is to sort things out. The longer you leave it, the more serious the situation could get.
For some people, the answer is a new loan. Look at your monthly payments. How much are they costing you? Now think about the total amount you owe. Could you take out a loan to pay it off and manage a single monthly payment?
You need to consider this option very carefully. Think about:
This article is intended as general advice only which is not intended to cover specific circumstances and needs. The information in this article is also not linked to any of the products offered by Clydesdale Bank PLC.