If you are struggling to keep up with your debt repayments each month it is better to be proactive and come up with a solution, rather than let your accounts fall into arrears. There are several options available to consumers these days which include using:
- Paid Debt Management Companies
- Free Debt Management Companies
- Contacting the Creditors yourself
All three of the options have the same ultimate effect, which is to let your creditors know that in your current situation you are unable to continue meeting your agreed payments and would like to offer a reduced amount until if/when your situation improves.
This is done by constructing what’s called an Income & Expenditure, detailing all of your money coming in and all of your outgoings each month. The idea of this is to show your creditors that with the amount of money you have available each month after paying the essentials such as food, rent, electric etc that it is not feasible to continue with your debt repayments at the current level.
The figures will detail all of your other debts to each of the creditors and usually offer a pro-rata payment between all of them with the amount of available money you have. Additionally it would request that interest is is frozen on the accounts until your situation improves to prevent you from falling into further debt.
This is pretty much the long and short of what paid Debt Management companies do.
The good news is that if you feel confident enough to deal with your creditors, you can do it your self for free, either simply by wringing to them or with the help of one of the free organisations such as Citizens Advice, CCCS or Payplan.
If you do not feel confident contacting your creditors your self, check out my post on choosing paid debt management companies