Debt Isn’t A Disaster If You Take Control

It has been a strange few years for everyone as once we slowly started coming out of the pandemic, we nigh on straight away went into a cost of living and energy crisis. Whilst there is some light at the end of the tunnel now with energy prices set to fall, and inflation slowly coming down – it remains a tough time for most families around the country and they continue to juggle their incomings with much higher outgoings.

There will be plenty out there who feel they cannot cut back any further, and have already raided savings, so plenty may well unfortunately now be taking on debt in the hope that things improve sooner rather than later. Even if that is true, never forget you can find some humour in the likes of a Lottoland blog that discusses the most expensive food and drink on the market that probably tastes no better than what we all have anyway.

For those who have already begun strictly budgeting on food shops and ensuring they save money by not doubling up on what they already have in their cupboards, using the reduced section as fully as they can and even making better use of your freezer to cut down on waste and extend the lives of some items, for those dipping into debt in an effort to tide themselves over, there are some simple things that must be remembered – especially if you notice you are really beginning to struggle with repayments.

Firstly, do not panic, do not feel ashamed for the position you have been forced into, and do not bury your head and try and ignore the problem – accept the situation, face it head on and know you are not alone. The Financial Conduct Authority recently confirmed that their investigations showed that 11 million adults in the UK were now struggling with debt repayments (a rise of 3.1 million on last year).

The first step is speak to one of the many charities there to help, like the Citizens Advice Bureau. They can help with budgeting if needed, walk you through an income and expenditure sheet that will help when talking to creditors as it will show what surplus income you truly have) and even help you organise bill payment priority as rent/mortgage, energy and Council Tax have to take precedence to avoid more serious consequences and costs.

They will also be able to help identify what additional benefits (or even one off grants) you may be entitled to, which will obviously increase your income and allow you to better juggle debts, whilst still living. This advice should cover both extra benefits, possible Council Tax or utility bill reductions schemes, as well as more commercial social tariffs when it comes to the likes of broadband and TV packages.

The next step is absolutely speak to your local council, energy suppliers, bank and, or, credit providers and let them know you ae struggling and want to work with them. Energy providers are required to agree a suitable debt repayment plan, most banks and credit providers will also agree payment plans – pause further action, and put a freeze on very unhelpful finance charges.

In England and Wales specifically, there is also a scheme known as Breathing Space; and this is where someone like the CAB is key, as they can further help by putting you in touch with an accredited debt advisor who can submit the application on your behalf and because it is acknowledged you are actively seeking help, whilst you still need to make good on debt payments, if accepted it means creditors will not take enforcement action, contact you during the period, nor add interest or charges – it is only a 60 day leeway, but that’s plenty of time to put the advice in place and agree affordable repayment plans that will help take the stress and strain off, and let you get back in control.

If your personal situation is more concerning, someone like the CAB will able to talk you through those more immediate and serious concerns which may well involve bankruptcy or Individual Voluntary Arrangements and help you decide which is the best option for you in those circumstances.