Debt crisis – what is it and what can you do if you are in one. We have three important tips to help you avoid disaster.
If your debt problems are starting to mount and you cannot face opening the post for fear of more bills arriving, you may be in a debt crisis.
There are levels of debt ranging from having to face an uncomfortably large credit card bill to the position when you have insufficient money to pay your important bills such as the mortgage, rent or utility bills.
Being unable to pay these essential bills which threatens your livelihood is when you know that you are in a debt crisis. You must act quickly to avoid, but what can you do?
Face up to the facts
As recent research has shown, around 20% of people with debt problems hide this fact from their partner. They are also probably trying to hide the extent of their problems from themselves, hoping that things will get better.
Unfortunately debt problems do not resolve themselves. If this sounds like you, then you must start to discuss your situation with your creditors. It is very likely that you need sound advice and help in doing this.
Seek debt advice
The advice available depends on the severity of your problems. If you are in a debt crisis then you need help from an organisation that can start to negotiate with your creditors as soon as possible.
Debt advice also depends on where you live as laws concerning debt are different in Scotland, Wales and England. It is important that you receive advice under the correct legal system.
The National Debtline is a free and confidential service that covers debt issues under English, Scottish and Welsh law. They supply sample letters that you can send to your creditors and, most importantly, are available to discuss your situation in a confidential and sympathetic way.
If things are getting very urgent and you need immediate relief from your debts then you may consider a debt management company that could help you get an IVA or set up a debt management plan for you.
These companies get to work very quickly and start contacting your creditors on your behalf straightaway.
Avoid depression and relationship problems
Having a debt problem that seems to be getting worse and is perhaps threatening your home and family, is difficult to cope with.
As we have discussed, pretending that all will be OK soon, or hiding the problem from your partner will only make matters worse. They will find out about the problem soon.
It is important that you don’t become so depressed about your circumstances that your relationship suffers as a result. After all in a debt crisis you need to be strong to face up to the challenges ahead, and this means being in a strong a relationship as possible.
If you need to talk to someone who can help with depression then the Samaritans provide an excellent free service. Your GP could help out too.