Life is expensive. In fact, many people have at one time or another found the cost of living to be higher than their income. No wonder it is so easy to fall into debt problems. As our lives become more complex, the cost of it increases. The number of contracts, subscriptions, loans and store cards we use continues to increase. And when we buy by card, it’s easy to lose sight of the cash that is left.
Debt can easily get away from you. You might not even be aware of it until it is too late. Your bank could add charges for going overdrawn to your account, even though you hadn’t noticed that you had spent too much. That horrible sinking feeling when you open your credit card bill and see that it is a lot higher than you hoped can be pretty awful too.
Then, of course, is the stress of owing more money than you can realistically afford to repay. Missed payments start to add up. Letters arrive. Some of them can be quite rude, and others might threaten court action or even bailiffs. If they keep coming, your stress levels are going to reach critical points. It’s time to stop them all.
If your debts have become unpayable, then you need to notify each of those companies straight away. Pull out all the letters that are sent and input the names and numbers of each company into a spreadsheet. Next to each one put the figure that you owe. Phone each company and explain that you are no longer in a position to keep up the originally agreed terms. Offer to make a minimum payment to each until your situation changes. You should also get them to confirm that no further letters of demand be sent and that no further interest charges be added.
Some companies may push their luck and say no. Don’t panic. Simply put your terms in writing and post it to them. If the harassment continues, it’s time to check your legal rights. When you’re being harassed by a debt collector, it can affect your health and leave you concerned about your rights. A specialist lawyer can help you to better understand your position and may be able to deal with the situation on your behalf.
When life changes dramatically even minimum payments can stretch you too far. This is when you might choose to consider a consolidation and even bankruptcy. It’s important to remember that any special terms like this will affect your credit rating for many years. It might also affect your ability to take jobs in financial institutions and other industries. You may no longer be eligible for phone contracts or certain energy tariffs. It may also negatively affect future mortgage and credit applications.
If you need to look at bankruptcy, then chances are you also need to address your income. A lack of income doesn’t just affect the bills you need to pay. It can affect your ability to put food on the table or a roof over your head. Securing a regular income should be your priority. Look at freelance jobs you can take from home, and continue to apply for any employment near your home. Every little helps. It also demonstrates a willingness to fix the problems you’re encountering which can often help when dealing with creditors.
Get Back On Track
So how can you get back on track when things have gone wrong? Once you’ve started to deal with the problems, you’ll know where you stand with creditor repayments. The next thing to address is your outgoings. To create an effective budget for each month, you need to collate all your receipts for the last quarter to see where your money is going.
The essential costs are food, energy bills, phones, broadband, insurances, your mortgage and your car. Each of these costs can be reduced, and everything else needs to be stopped if you’re struggling to make ends meet. Batch cooking can reduce your energy bills and your grocery bills. Stop buying foods beyond the staples. Snacks and candies need to go!
Search for cheaper providers of your insurances, energy, phone, and internet services. Using each of them less can also reduce the ongoing costs. As for your mortgage? If you own your own home, don’t forget that another mortgage provider may offer a cheaper interest rate. However, if you have had to take special measures to write off other loans, you are unlikely to be offered a preferential mortgage. Draw up a household budget you can stick to and review it often. Good luck!