A debt management company helps you re-organise your financial affairs to help see you out of debt. However, they typically charge you something for their involvement and some recommend arranging additional credit!
The National Debt Line is a countrywide call-in helpline. It offers , without cost, individual and private counsel to persons on settling debt troubles in the UK. Their call-in helpline is available every day of the week plus, they have an online website that has lots of valuable help and advice on it. The National Debtline is part of the Money Advice Trust or MAT for short, and is a fully registered charity. MAT (the Money Advice Trust) presents persons a strategic process to correcting severe personal debt problems so that they can take proper control of their financial affairs.
A default is a term that is used to indicate when you have neglected your credit responsibilities. In the event you have missed a payment on a mail order account, for instance, they can place a Notice of Default on your credit file. This will have a negative effect on your file at a later date if you would like to take on more borrowing.
An arrear is a legal term and is used to indicate when you are late in repayments on a credit agreement. Someone is considered as ?in arrears? as of the time that their first scheduled payment is missed. This term is typically used when connected to late payment of mortgage, rent, credit cards or personal loans and also tax payments and child support.
If you are in the situation where you have so many debts that you can no longer afford to pay them, the first thing you need to do is to prioritise them.
Write a list of all your debts, putting them into order, with the most important at the top of your list. (First would be your mortgage/rent as not paying these could see you end up homeless); then utilities (if you do not pay these your gas/water/electricity supply will be cut off and you will be taken to Court); and so on.
By sorting out your priority debts - ie the ones that if you do not pay them will have severe consequences on your life - you can then work out how much you can realistically afford to pay to each creditor every month. Even a little bit is better than nothing.
Then contact the organisations and explain that you are having problems meeting your bills. In most cases they will be sympathetic and try and work out an arrangement where you pay less until you are back on your feet. The 'less' important debts where maybe you cannot afford to allocate money to, you can ask your creditors if they could freeze the debt until such time that you have money available.
You could consider a debt consolidation loan to pay off the bulk of your debts, but do remember that if it is secured against your home and you fail to meet the repayments, you could lose your home.
Try and reduce your outgoings - simple things like not having take-away meals; swapping utilities to a cheaper provider; getting a cheaper car etc - can reduce your outgoings by a huge amount.
Consider getting a part time job - bar work is ideal as you can have a social life while earning money!
Finally, contact your local Citizens Advice Bureau - they can help you work out a financial plan and even negotiate with your creditors.
