5 Top Tips To Manage Your Debts.
As soon as you find yourself struggling with financial difficulty, you really must work out a plan of action and tackle your debts. Follow our tips to help you in doing this.
1. Write your Creditors List
You should start by writing down all of your debts. This will be your 'Creditors List'. It will show you exactly what you are dealing with. Often when there are a number of debts it is easy to forget some of them, but this should help and make it clearer to deal with. At this stage you need to prioritise your list with the most important at the top. You may notice that the largest debts tend to be the most important ones. Be realistic as you may have smaller debts that may be of higher priority. These are often debts with utility companies who may be at the stage of cutting off your service. Without doing this list, it can end up in a shambles and you may end up missing out something that will jeopardise what you are doing.
2. Draw up an Income and Expenditure Profile
It pays you to have an Income and Expenditure Profile filled out. It will make things extremely clear on what money you are left with at the end of the month to be able to deal with payments for your debts. You need to be as honest as you can with yourself when filling this in. Every penny really does count in getting this right. Say most weeks you use £30 in fuel, but every now and again you only use £20, you must list £30 or this will let you believe you have an extra £10 left at the end of your month. In setting up payments to your creditors this can be the difference between making the payments on time or defaulting on the arrangement. This is not a position you want to put yourself in. Everything has to be on there from your weekly paper bill, to eating out every Saturday. You will find that your creditors (those you owe money to) will request a copy of this to decide on an arrangement with you. If you would like a copy of our 'Income and Expenditure Profile' to fill in then please go to our website and send a request. The form can be found here- http://www.mckenziepartners.org/resources
3. Talk to your Creditors
It is too easy to bury your head in the ground and stop opening mail. Your creditors would rather hear from you even just to confirm with them that you are unable to make payment than to not hear from you altogether. They would rather work with you in receiving what you can afford than to receive nothing. They would rather avoid the expense of taking things to court and ending up with bailiffs visiting you. It really depends on who you owe money too. You will find that for instance a utility company has many payment options than you know. They want you to continue to buy from them, but can work with you so that you pay for what you are using and a small part off of your debt every month which will sort it out in the end. In not talking with them the problem, just increases and will not go away. Where your debts are, for instance loans or credit cards many creditors may will agree to suspend any interest on your debts to do their best to avoid you getting further into debt. This will allow you to make regular smaller payments to chip away at the debt till you are back in control of it. Your debt will not go away and once you start your correspondence with them you will be a lot more relaxed and they will be happier something is happening.
It helps some people to get professional advice from an expert. Someone who is able to guide you and if needed make the necessary arrangements to set these payment plans up for you. A great deal of people feel a lot of pressure when talking to their creditors. On a professional level they will avoid pressing you for more money than you can afford when they are having to deal with a third party. They can also work with you to get on top of your debt and manage a better use of your finances to get through it. Most should offer a free consultation to talk through the situation. At the end of this you will either choose to do it for yourself or take on some help. It is sometimes knowing what your legal rights are that lets us down in a stressful situation. McKenzie Partners are here for you if you need us.
5. Find out what are you’re entitled to
You may find you are entitled to some benefits and in the situation you are on a low wage this may be tax credits as well as rent or council tax benefits from your local council. Remember that if you have credit cards or loans you may also have insurance on the debt, which could help freeze the payment or pay them for you for a period of time all depending on the terms and conditions of the insurance package you are paying for. This of course is only if you are signed off work for any medical reasons or have lost your job. Be sure to read the small print to be sure.
If you have any questions please email McKenzie Partners at [email protected] and check out our website at www.mckenziepartners.org
