6 September 2016

Fixing Your Finances

One of the things that we as human beings are good at is sticking our head in the sand to avoid a problem.  If I don't think about it, it is not happening.  If I cannot see it, it is not there.

This is a tactic that many of us use when it comes to our finances.  The problems creep up on us slowly but mount every month, we pretend not to notice; until the point where our debts are underneath the sand with us.

This happened to me.  It happens to many people.  It has taken me five years to sort out my finance problems and along the way I have learned many lessons, a couple of which I will share with you.

Please note that I am not a financial expert, nor am I qualified to give financial advice.  I am writing this blog today because people do not talk about being in debt.  We gloss over the subject, we hide the problems in shame.  I was that person. In debt more than I could handle, through my own fault but yet with a 9-5 job.  

The first tip.  Do not panic.

When I (finally) took my head out of the sand I had no clue what to do, and went for the first option available which is hindsight, was the wrong thing to do. I panicked.  I didn't research what I could do, and ended up paying out far more as a result.


Once you have realised the extent of your money problems, you need to look at the different options available to you in order to resolve them.  

Your credit rating by this time is probably shot to pieces, but depending on how much you owe, you could still get a bad credit loan from somewhere like Glo.  I wouldn't recommend doing this if you are severely in debt, but on smaller debts, it may help to pay everything off at once rather than dragging it out.

Another option, and the one I went for, is a debt management plan.  

My error was that I did not research debt management plan providers and just went with the first one I found.  This ended up costing me over two thousand pounds by the end in admin charges.  

What I know now is that there are free debt management plan provides which do exactly the same job.  They work out what you can afford, negotiate with your creditors and work out a plan for you to pay off your debts, often with the interest frozen.

I would suggest contacting the Citizen's Advice Bureau who have loads of advice on the subject and the link I have put in goes directly to the free providers of debt management plans. 

If you owe more than ten thousand pounds, you could go into an IVA (Individual Voluntary Agreement).  You can get free advice on this from the Money Advice Service.  This enables you to get around 70-80% of your debts written off, and the remainder is handled by an insolvency practitioner (you will pay for this service).

I hope this helps a little for anyone reading through who has only just pulled their head out of the sand and is, as I was five years ago, in a blind panic.  Don't panic.  Research.  Make use of the free resources available.  

You will get through this.



2 comments:

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