How to get out of serious debt
If the festive period has left you with serious debt problems, here's what you need to do.
Doug Waters - Getty
The weeks after Christmas can be a particularly difficult time for those struggling with debt as the bills for the festive period begin to stack up.
If you're struggling to make monthly payments or meet repayments towards your mounting debt, don't let it get you down or, worse still, bury your head in the sand.
Take action now as the earlier you do, the easier it will be.
First, sit down and work out a monthly budget sheet with a comprehensive list of everything coming in and going out each month. This is a good way to identify any easy wins - money you're wasting on unnecessary items.
It also clarifies your financial position and puts you in a better position to discuss options with creditors.
Tackle your priority debts first - these include mortgage payments or rent, utilities and council tax. Not paying can mean severe consequences, such as eviction from your home or your gas and electricity being cut off.
If you've not already done so, contact the people you owe money to and explain your difficulties. The earlier you highlight problems, the more they can do to help.
Talk to a professional
Working out how to deal with problem debt can be tricky, so you might want to consider seeking professional help - the Consumer Credit Counselling Service (CCCS), National Debtline or Citizens Advice Bureaux could all offer assistance.
The CCCS provides free, impartial advice either over the phone or online via CCCS Debt Remedy. CCCS will look at what debt solutions are available to you and recommend the best way forward.
They will help negotiate with creditors - or do so on your behalf - to secure the fairest and most affordable outcome.
Your debt options
If you have a budget surplus but can't afford full repayments, a debt management plan can be arranged.
If you're simply not in a position to pay your debts, some form of insolvency may be recommended in extreme cases. Debt relief orders (DRO) can provide a fresh financial start for those on low incomes who have few assets and no realistic chance of paying off relatively low levels of unsecured debt.
If you're under more short-term financial pressures, think carefully before going down the route of payday loans as they can prove extremely expensive.
Under no circumstances should you borrow from unlicensed money lenders, or loan sharks, who operate outside of the law.
Above all, don't get down about your debts. Free help is available, all you need to do is seek it.
CCCS can be contacted by freephone helpline (0800 138 1111), 8am to 8pm Monday to Friday, or our anonymous online counselling system, CCCS Debt Remedy.
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Please note that articles on MSN Money do not constitute regulated financial advice, which recommends a course of action based upon the specifics of your personal circumstances. The articles are intended to provide general personal financial information. We urge you to consult an Independent Financial Adviser (IFA) before making any important decisions about your finances. You can search for an IFA in your local area. Any statement regarding financial services products and tax liability is based on legislation and tax practices as at 6 April 2011, which is, of course, subject to change. The value of any tax benefits or reliefs depends upon the individual circumstances of the investor. When investment performance is mentioned you should remember that past performance is no guarantee of future performance. Where products have an underlying investment content, in many cases the value of the investment can fall as well as rise. For with-profit based investments, there is no guarantee as to the level of bonuses that will be declared, if any. Where mortgages or secured loans are explained do remember that your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. All mortgages are subject to underwriting, status and are not available to people under the age of 18.
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