Jasmine Birtles
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6 ways to get out of debt today
Kamal Khurana
23rd Jul 2019
Want to get out of debt today?
Quite right. And you can.
The good news is that it’s possible and, importantly, there’s a lot of help out there for anyone wanting to be free of debt.
Here’s our guide to six easy steps to getting out of debt.
- First things first
- Talk to friends and family about it
- Free debt advice and help
- Maybe speak to your employer
- Can lenders and creditors do anything for you?
- There’s support everywhere – you are not alone
1. First things first
FACE THE TIGER!
I know. The last thing you want to do when you’ve got nasty letters and calls coming through the door is to look at them and deal with them.
But the longer you leave it the worse it gets.
So….
get a friend round to help
You don’t need to do this on your own. Get someone kind and supportive just to sit with you while you open those statements and bills, put them in order and write a list of how much you owe, who to and how much each debt is costing you (i.e. the interest rate)
If you’re really serious about paying off your debt you have to be honest with yourself.
Don’t leave anything out.
Work out your income and expenditure and prioritise the payments of your debts starting with the ones with the highest interest and going down to the cheapest.
Throw as much money as possible each month at the most expensive debt and pay the minimum on the rest. As soon as you’ve paid the top one off, do the same to the next and the next etc.
2. talk to friends and family about it
Debt isn’t just a financial issue; it interferes with all the daily aspects of your life and can cause anxiety, stress and mental health issues for you and your family.
According to research by Payplan.com 42% of people in debt don’t feel comfortable talking about their problems with even their closest family or friends.
- But don’t be afraid or embarrassed to tell your friends and family about the problems you’re having. This way you’re more likely to find help with dealing with your debt.
- Keeping debt a secret can also create a lot of stress and pressure so be honest with those around you.
- Your family might be able to help by lending money or even provide much needed emotional support to get you though this tough time.
- Ask someone close to you that you trust to sit down with you and go through all your incomings and outgoings and help you put a plan in place.
- If you’re one of those people who can’t bear the thought of having to talk through your debt, then outline everything you want to say and ask a good friend to speak to someone close to you on your behalf.
3. get free debt advice help
These services are completely free:
We STRONGLY advise you to use them. They’re free and they have LOADS of experience.
But if you choose to pay (as many do) for debt advice and debt management, make sure you use a debt management firm that is a member of a trade association, such as ClearDebt or The Debt Counsellors Charitable Trust.
But even if you think it will be quicker and easier to use a company, remember that the debt charities offer FREE advice and help you to organise a debt management plan – all for nothing. Here are a few below…
- Community Money Advice is church-based and offers free help to anyone needing debt or other financial help. They both give advice and also stay with you, encouraging and helping you until you finally pay off that debt.
- Citizens’ Advice Bureau (CAB), provide free, confidential and independent advice from thousands of locations in the UK
- StepChange Debt Charity, a charity offering online debt remedy service and free debt advice
- Christians Against Poverty a national, free debt advice service that runs through local churches.
- Nationaldebtline.co.uk – the website has some useful sample letters for writing to creditors and a free phone numbers
- Payplan.com – free debt management company that make repayment arrangements
We at MoneyMagpie also offer lots of free advice to help you organise your finances and start making a dent in those debts.
Learn how to detox your finances and read our guide to looking after your mental health while dealing with debt.
4. maybe speak to your employer?
“There is no legal requirement to discuss your debt issues with your employer (unless it is demanded in your written contract of employment)” says Andrew Smith, External Affairs Director at the trading body Debt Resolution Forum.
However if this is causing you issues at work you may find it helpful to do so and most companies will be supportive of your situation.
Mandy Rutter, psychologist at wellbeing specialists Validium says, “Employers have a ‘duty of care’ to their staff. Almost half of the working population (47% or 13.79 million people) has access to an Employee Assistance Programme, services run independently from the organisation that offers advice and support by telephone and sometimes face-to-face.”
They’ll help you deal with the practicalities of the debt issues – or pass you to a specialist.
They won’t take the debt away but they will give you short and long term plans to manage the debt – so that the fears, stigma and stress of your debt is in control.
It’s also possible that you could get an interest-free loan from your employer to help pay off your debt (depending on the size of it). See what they say – it’s worth a try.
Start saving today with these 26 useful tips for saving money now!
5. Can lenders and creditors do anything for you?
If you’re still struggling to make your repayments, the worst thing you can do is stick your head in the sand.
Rather than hiding away from your debts, phone everyone you owe money to and explain your situation.
By getting in touch with your creditors at an early stage, you can give them an opportunity to help that might not be there in future.
Remember dealing with debt is possible; you just need support to get you through it.
If you’re one of those people who can’t bear the thought of having to talk through your debt then sit down with a friend and outline everything you want to say then they can speak to someone for you.
Providing you have serious debts the Citizens Advice, StepChange Debt Charity or Community Money Advice, for example, will also speak with your creditors on your behalf.
Believe it or not, most lenders don’t want to see you in debt. Reclaiming property and possessions is really costly, as is going through the courts – so most creditors will use these options as very last resorts.
But if your creditors don’t know you’re having financial difficulties, they’ll assume you don’t want to pay and start taking action against you. This is why it’s so important to get in touch with them.
Rather than hiding away from your debts, phone everyone you owe money to and explain your situation. By getting in touch with your creditors at an early stage, you can give them an opportunity to help that might not be there in future.
6. Support from Moneymagpie
We know dealing with debt can be tough but we are here to help lift your spirit and hopefully your bank balance too.
There is light at the end of the debt tunnel and it comes in the form of our free MoneyMagpie Get Out Of Debt Emails.
Not only will this plan ease your anxiety about debt but it will also make sure you know where to look for the best help and support.
For weekly, free support, handy hints and a practical guide to dealing with debt management, sign up to our free MoneyMagpie Get Out Of Debt Emails .
Over to you…
Have you had experience with debt and come out the other side? Share your experience in the comments below to help others and show them there is a light at the end of the dark tunnel.
The only debt I have left is an overdue mortgage. Credit rating or not I never want a credit card again because there is no such thing as credit and it is the biggest scam ever. There is too much emphasis on these credit ratings
Some useful information.