In the small hours of the morning, money worries about bills and debts can go round and round in your head:
- mad, complicated ideas about how to pay off some debts with other debts;
- worries about your partner (he doesn’t know how bad it is!) and children (new shoes!);
- panics about what “they” (debt collectors, a judge in court, bailiffs etc) can do to you, etc.
So you get up the next day feeling tired and decide to just get through the next few weeks and then think about your debts. But that time never comes.
Not being able to sleep properly is a warning signal that problem debts are starting to take over your life and impact your health.
One of the possible debt solutions will work for you and your family. It may not be easy but there will be a way forward out of your current mess.
Here are some practical pointers for some common problems:
“I’m not sure how bad my debts are”
Living busy lives it’s easy to let your finances drift. But if bills and credit card statements arriving gives you a sick feeling, then the sooner you act, the more options you will have.
- make a complete list of your debts, how much you owe and what the monthly payments are.
- if you think the monthly payments are affordable, read up about snowballing – that’s the fastest way to clear your debts and end up with a great credit score;
- if you could manage if only interest was frozen, look at whether a payment arrangement is right for you. If you can’t face talking to your creditors, call StepChange. They can arrange a debt management plan for you, or discuss any better options.
If you aren’t sure if you can manage the payments, the best way to find out is to try not using your credit cards at all for a month. If you can, great! If you can’t, it’s a sign that every month your problems are getting larger.
“Another month, another budget crisis”
Is your current budget realistic? There is no point trying to live off so little that you keep failing. That’s like going on a crash diet – you can’t keep it up for months.
You also have to accept that not every month will go smoothly. That doesn’t mean you are bad at budgeting and may as well give up.
How have you been trying to budget so far? The two main approaches are:
- Piggy Banking – where you separate the money you need for your most important bills into “pots” so you can’t spend it on something else
- Tracking everything – this is a lot easier and less hard work with the new very good apps that can help you budget better.
If you have failed a lot with one of those approaches – try the other way!
“If I can’t get things sorted we will be homeless”
If you have rent arrears or mortgage arrears then you need debt advice as soon as possible. Don’t delay, especially if a court case is coming up. Even if you think there is nothing you can do, there may be options you are not aware of:
- call Shelter in the morning or go to your local Citizens Advice.
“I’ve had letters threatening bailiffs”
These may be bluffing, but if you have court papers or have got a CCJ you need to take action. It is almost always possible to avoid bailiffs coming if you don’t ignore a debt.
National Debtline is a good source of advice for everything to do with CCJs and court action.
“I just need a consolidation loan”
Making one payment a month sounds so much easier, but it can be hard to get a large enough loan if you are already in a mess.
- if you haven’t already done this, find out your credit score;
- research consolidation loans and decide if you need to look at other debt solutions;
- rule out expensive loans. They are a trap, not a solution at all.
“The bills are just too high”
In 2017, Citizens Advice helped people with 690,000 household bill debt problems such as council tax, utility bills and mobile bills – those everyday bills everyone has to pay. That is a lot more than the 350,000 problems about credit cards, catalogues and loans they saw the same year.
- make sure you know which bills are “top priority“. Your council won’t phone you up and hassle you, but they can be faster to go to court and then send in bailiffs than most other creditors;
- if you are on benefits or a low income, talk to Citizens Advice about whether you can get help with the rent, council tax or be on a cheaper tariff for water.
It’s not too early or too late for debt advice
Sometimes people think for years that their problems aren’t serious enough to talk to a debt adviser about. Then they switch to thinking there is no point in debt advice because their situation is so bad…
They are wrong on both points! Debt advisers rather like seeing people with “early stage” debt problems – we can help you develop a plan that starts to cut your debts and improves your credit record. And even if there is no chance of ever repaying your debts, it matters that you get unbiased advice to choose between the different sorts of insolvency.