Debt Help

There are many reasons why you may find yourself in debt or struggling to cope with a difficult financial situation. Although it can be incredibly stressful to deal with, you’re not alone – as according to the Office for National Statistics, total household debt in Great Britain had reached over £1 trillion by mid-2018.

Fortunately, no matter what situation you find yourself in there is help available, and beginning to understand your status, along with what options are available to you, is a good starting point.

Understanding Debt

Understanding debt

It can be tricky to understand, particularly as there are so many forms of it that you may have to contend with. The financial decisions that you make when working out how to deal with your debt can have long-lasting implications for your life and it’s important to understand as much about your position as you possibly can. Not every piece of information will apply to every debtor, but there is some common ground and grasping the basics can pave the way to a better understanding of the bigger picture.

Gathering information about your debts

Before you can start to build a strategy for dealing with your debt, it’s crucial to have a complete picture of what you owe, who to, and on what terms. You might achieve this by making a list of all your debts, getting copies of your credit reports, or obtaining up-to-date balance statements from your creditors.

What are priority debts?

Understanding your situation doesn’t stop at simply knowing what you owe. Although it’s a complex topic, it can often be divided into two main categories – priority and non-priority. Priority debts are so-called because the consequences of failing to keep up to date with payments can be so severe. Naturally, everyone has different priorities and circumstances, however common examples of priority debts relate to rent or mortgage payments, utility bills, tax payments and court fines. These are the things that keep a roof over your head, and with the ability to continue living your life whilst working on your financial situation.

Common myths about debt

The debt “blacklist”, taking on a former resident’s debt when you move into a new house and avoiding it by moving away from the UK are all common myths that are widely circulated. When it comes to learning more about it, it can be important to make sure that the information you’re taking on board has come from a reputable source and can be fact-checked.

Common terms

Debt can be confusing and it’s fair to say that understanding it is not made easier by the jargon and technical words that are so often used by banks, creditors and others. Whether you want to know the difference between a creditor and a debtor, what APR is, or what counts as a default – understanding your financial situation starts with knowing the language.

How to deal with debt?

IVA vs Bankruptcy - what's better?

Once you’ve come to understand your position, starting to deal with your debt is the next logical step towards a healthier financial future. The most effective route to dealing with it is planning and following an approach that accurately reflects your circumstances and goals. The following topics are just some of the factors you may wish to account for when dealing with your own debts:

How to avoid debt?

The medical adage of prevention is the best cure rings true in the context of debt as well, and many debtors will find it incredibly difficult to solve their issues. Despite this, credit in some form can be very hard to avoid – particularly in a world where the cost of living continues to grow and where fast finance is readily available.

How to deal with creditors?

Approaching your creditors can be one of the most daunting steps you have to take when attempting to deal with your debts. Whilst this process can be difficult, it’s unlikely to be quite so nerve-wracking if you approach it armed with knowledge about your debts and with ideas about the best way in which to communicate with your creditors. It isn’t a one-way street, and most creditors want cooperation just as much as debtors.

How to reduce debt?

Reducing your debts is a well-trodden path towards a more secure financial situation, but it isn’t always as easy as it sounds. Whilst increasing your monthly payments or generally putting more money towards what you owe sounds like an ideal solution, this isn’t always possible and there are many other solutions available that could better suit your circumstances.

Opening a safe bank account

If you happen to be in debt to a bank or building society, you may find it increasingly difficult to use any everyday banking services with that provider. This is because, in certain circumstances, banks and building societies reserve the right to take money directly from the account of somebody who is in debt to them. Opening a ‘safe account’ with a separate provider can allow you to continue receiving an income whilst you get back on your feet.

Getting help with debt

Help with debt

There’s no escaping the fact that debt can be difficult to deal with, and there’s no shame in seeking help when you need it. Whilst there’s no shortage of professional advisors and charities offering assistance to UK debtors, there are some issues that need a more sensitive approach, particularly where one is vulnerable or suffers from ill-health. For the most part, creditors are not the antagonists that they are sometimes made out to be by the media, and the vast majority are willing to exercise compassion and common sense when approaching financial issues. 

How To Make a Complaint?

Despite your best intentions or efforts made by your creditors, everybody has times when they get it wrong. Fortunately, the UK has a well-established financial regulation scheme which can help debtors to seek redress where they feel that they have been treated unfairly by their creditors. In particular, the Financial Ombudsman Service has the authority to investigate complaints about all debts which are regulated by the Consumer Credit Act and is well placed to support debtors if their experience fails to meet expectations.