If you have a high level of debt and are struggling to keep up with repayments it is important that you take action as soon as possible. If you do not deal with your debt worries early on then you could find that you soon start missing repayments or making late repayments, and this can lead to an adverse credit rating, creditor hassle, stress, and illness – you could even end up with court action being taken against you.
At this time of year in particular many people find that they have stretched themselves so far financially over the festive season that they simply cannot meet repayments on the debts that they have accrued in addition to household bills and other costs.
Of course, it is not just those that have accrued new debts that can suffer when it comes to repayment of debts. Tighter lending conditions, rising energy costs, high food prices, and rocketing petrol costs have all contributed to affordability problems, and when the high interest rate is added to this it is easy to see why so many households are quickly falling behind with their debts.
There are a number of options open to those with unmanageable debts, and for those that are confident enough to deal with creditors themselves informal arrangements may prove effective. If you wish to come to an informal arrangement with your creditors with regards to your debts you do need to be organised. It is important for those with problem debts to look at all the options carefully – many rush into applying for bankruptcy or an IVA without considering the long term consequences, and without finding out if there are other, less damaging solutions available.
You do need to be organised in order to come to informal arrangements with your creditors. You will need to write to each of your creditors explaining your financial situation, enclosing details of your income and outgoings, and making a reasonable offer with regards to a monthly amount that you can afford to pay, either on a temporary or a permanent basis depending on your situation. Make it clear that you intend to repay the debt in full, and that you are simply asking for lower repayments and a longer repayment period because of your financial situation.
You should then chase the creditors by phone after two weeks if you have heard nothing to check whether the letter was received and whether they have an answer. In the meantime, make sure you continue with repayments, as failure to do so will reduce the chances of your creditors agreeing to an informal arrangement. Once your creditors have agreed to your proposal you can reduce the financial strain through having to make lower repayments for the time period agreed.
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