The Best Way To Get Out Of Debt. Use A Debt Management Company
Many Of Us Have Made The Same Mistakes Getting Into Debt
I, like many who will admit it I imagine, got into debt not because of an emergency like the roof caving in or somebody unexpectedly getting ill but through my own stupidity and not keeping on top of things. A year ago I had more money than I could spend, I was lending or giving money out to friends and family at the end of the month because I still had spare. Fast forward a matter of maybe four months and I had a look at what I was going to pay out on payday and found I couldn’t even cover it with my wage. I don’t earn a bad wage, after tax and paying for essentials such as where I live I end up with about £2200 to spend/waste on what I please. I never got a mortgage or anything like that, I have a car on finance but everything else is silly little things, a credit card, payday loans, store credit, cashing cheques. It all added up until I was in a right mess without even realising it. But I’m now getting out of it. Slowly. This is how to do it.
Speak To A Debt Management Company
The first thing I did when I realised I couldn’t pay that month was phoned a debt management company. I don’t even remember where I found out about them probably a search on Google. Gregory Pennington the one I use is called but there are quite a few of them. What they do is this. On the first chat with them you go through together everything you owe, secured and non secured. They will only deal with your non secured debt so car finance, mortgages and hire purchase are all still your responsibility. However what you pay out on these secured debts will be taken into account by them when working out how much you can afford to pay to clear your non secured debt. Next you will go through your expenses for example what you need to feed yourself and whoever you support, if you smoke, essential travel if you work away from home and anything else deemed essential to survive and maintain an at least semi-civil life. They won’t deem going downtown drinking on a Friday night essential to this. This will be added to what you pay on secured debts and anything left of your wage is then what they’ll say is what you’ll offer up to pay off these debts.
They Will Negotiate With Your Creditors On Your Behalf
They will now tell you how long it should take to pay this off at the rate you decided earlier, but they will also bring in their fee. A percentage or £90 a month from the sum decided you can afford goes to Gregory Pennington, I would imagine they’re all similar prices. This may sound a lot but you should consider what they do and whether you’d be able to do it without them. What you’ll be told to do now is cancel all direct debits and standing orders set up for these unsecured debts. If they take money from your bank card then you need to cancel that too and order a new one. None of these companies are to have any way to take money off you but you must make sure your secured debts are still getting paid. Remember these debts are your responsibility. Next is when they really start working for you. They now write to all your creditors and explain that you’re a bit silly and have got yourself into a pickle. It’s easy done as is displayed by the numbers of people who do it so creditors are nearly always sympathetic. What they also ask is if these creditors could freeze interest and fines so that what needs repaid is the amount as it is now. Sometimes they do, sometimes they’ll offer reduced charges, sometimes they’ll say unlucky we’re still charging. The majority are decent about it though. Just by freezing these charges you could well have made back that £90 a month.
People Will Still Keep Asking For Their Money
At this point, until they receive the letters, these creditors don’t know why you’ve not paid them. Therefore of course they’re going to get upset and start threatening. Using phone or E-mail you can reply to them explaining you’ve had to use a debt management company and they’re in the process of getting in touch. They’ll probably come back to you again claiming they don’t work with this company or you must pay now but don’t. Forward any messages like this onto your debt management company and let them deal with them. You’ve not ignored your creditors you’ve explained the situation so you’ve done everything right.
Keep In Touch
What you absolutely need to do though is make sure you pay the agreed amount to your debt management company. If there is an emergency one month and you can’t pay as much, speak to them straight away. They’ll arrange what you can pay instead and speak to your creditors. Do not just miss a payment and try and hide. Your debt management company has put in place arrangements with your creditors, if you break the arrangement and they don’t know why your creditors will not be happy and cancel any deals they’ve set up. Your creditors are being decent with you so be decent with them. Besides which missing this payment will trigger the letters of ‘we are disappointed you aren’t keeping to the agreed arrangement, give us our money now.’ Also remember if you keep getting threatening letters then pass them on to your debt management company who will hopefully shut them up for you.
Do Not Take Out Any More Credit
If you borrow more money whilst in this program then your old creditors will be annoyed and could once again cancel any arrangement. Don’t do it, don’t do anything without speaking to your debt management company first, you’re paying them £90 a month or whatever so use their knowledge on matters like this.
Prepare For A Difficult Time
Using a debt management company is not an easy answer to your debt problems, remember you are only left with enough money to get by. So be ready to watch your friends go out at the weekend without you, no holidays until you’re done and what could generally be quite a miserable time. But it’s not forever. The few months or couple of years that you’re in this are building to the day when you are back in control of your own life again. Just think, all the money you’re paying to this debt management company will be yours every month once this is all finished with. You’ll be receiving a decent wage again, you’ll probably have more money than you’ll want to spend. Also you’ll have learned a lesson about getting yourself in debt the hard way. Remember, you got into debt, big deal you didn't kill anyone. You're not the criminal the creditors would have you believe. They pay people who make it their careers to convince you to get into that debt in the first place, so you may feel ashamed at first but if there weren't plenty of people like us there wouldn't be debt management companies. It's just one of them things.
You could try doing everything the debt management company does for you yourself. You’ll save that £90 a month but it will be a lot of work. Also are they going to be as ready to listen or to play fair with somebody who isn’t as experienced? Credit Providers will lie and try to scare you into paying them. If you would like to try it by yourself though then speak to Citizens Advice first and they’ll tell you what to do. You should also keep in mind though that if you can’t pay as much one month, you need to speak to everyone you owe money to rather than just one phone call to your debt management company. It will be much more difficult and probably take much longer.