Debts ruin lives, and the deeper the level of money owed the more likely the destruction. They can start to build quickly and quietly, swapping money from one account to another in quick time. The various interest rates build up, payments get lost, and wages barely cover the carnage. However, organisation and finding the correct options can often guide a person away from being neck-deep in credit card debt, even if their wages don’t seem to offer a solution. Here are several options for you to build your way out of despair.
One of the main issues with paying debts is actually keeping track of when they need to be made. Even the most diligent, organised accounts can fall foul if the dates are spread across the month. Therefore, consolidating the debts into a single payment, to be made once per month without the payer needing to do anything, tidies up a lot of the housekeeping.
Look to reap the rewards of 0% balance transfer fees by swapping to accounts with lower interest rates, or eschew the transfer fees altogether with instalment loans. Some of these might even cater for those with poorer credit ratings, so shop around.
Contacting the lender/bank
It might seem a terrifying or embarrassing admission to accept that you are struggling, but you can be assured that banks see many people in your situation every day, often in much more perilous conditions. Bear in mind also that no lender or bank wants you to fail in paying off your debts – they would rather get the money back over a longer period than not get it at all.
Seek a meeting and explain that you are struggling with the payments. Be honest, and don’t try to ‘fudge’ the figures – the more forthcoming you are, the better the chances of untangling the problems. The lender should suggest a restructured financial plan where payments might be lower, but spread over a longer period of time.
Impartial advice from charities/debt management companies will not be enough to directly financially impact the debts, but their advice could help with payments to banks, lenders, utility companies, council tax, and all of your other outgoings. They may suggest options such as debt management plans, an IVA, and even bankruptcy – each sounds scary, but might get you out of a hole.
Perhaps lower down the list of preferred options, but asking a loved one to pay off the debt for you and then paying them monthly or weekly may give you breathing space. You might be able to agree much more favourable terms, but there’s at least two implicit assumptions with this option; that you will maintain the monthly payments and not take your generosity for granted; and that you will not re-use your credit card/loan afterwards so that your debt becomes even more onerous.