Coping With Debt
Tips for handling your debts
Debt Consolidation
If you have debts in many different areas - overdraft, credit cards, loans etc - then it may make sense to consolidate you debt into a single loan. This involves taking out a personal loan that will be large enough to pay off all your debts and leave you with a single repayment every month.
This can reduce the size your repayments, either by getting a cheaper deal (lower interest rates) or by spreading your repayments over a longer period.
Debt consolidation can be an effective way of easing your debt problems, although you won't actually be reducing the amount of debt you're in. In fact, you'll probably end up paying more interest in the long run, but making your monthly repayments more manageable can outweigh this drawback.
If your debt problems are too serious to be dealt with in any of the above ways, the next page has some more drastic alternatives - Debt Management, IVA, and Bankruptcy >>>
Debt Management
Debt management is the process of negotiating with your creditors to reduce your payments to a manageable level. If you owe a company money, they are usually happy to talk about ways you can repay over a longer period, or with lower interest rates, rather than you not repay at all. They'd rather have something than nothing.
You can contact your creditors yourself, but many people prefer to sign up with a specialist debt management company who will deal with your creditors on your behalf. This can make the process much less stressful, and will also have the advantage that you make just one monthly payment to the management company who will then distribute it among your creditors according to the agreements that they've negotiated.
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