With the global recession affecting almost all of us, many people are starting to buckle under the pressure and may consider opting to file for bankruptcy. But what you should know is that bankruptcy should be a last resort, and there are other ways to deal with debt before taking such drastic, not to mention long term measures.
Here are some much needed tips on how to deal with debt:
1) Acknowledge you have a problem
The first step towards finding a solution is acknowledging that there is problem, and debt is no different. Add up all your debt and expenses so you can get a clear picture of your financial state. Through Harrington Brooks, our online Debt Test could be the first step that you need to help you assess your debts and see what debt solutions are available.
2) Do not be intimidated by a nasty and demanding voice on the telephone asking for payments.
Many people find themselves being pressurised by debt collectors demanding their money. Some debt collection agents have been under investigation by the Office of Fair Trading (OFT) after complaints of some less than savoury tactics. If you have any complaints against a harassing debt collection company, feel free to call the OFT and report this issue.
3) Make sorting out your debt a priority
Check what debts are secured on your property, such as a mortgage or secured loan. If you default on these loans, you stand a chance of losing your home.
4) Seek free, informed advice
Seek professional advice about your debt problem. Harrington Brooks can offer you advice about your debt problem and have access to a range of debt solutions which may benefit your situations.
5) Think carefully about bankruptcy before taking the plunge
In the past, filing for bankruptcy seemed to be much more of a scandal than it is today. In recent years, filing for bankruptcy has become more and more easy, although going bankrupt is still a very serious, long term decision which should not be taken lightly. It may also affect your future employment prospects. Also, you could be severely penalised if you run up debts in a profligate manner and see bankruptcy as a mere formality.
6) Beware of firms offering an alternative to bankruptcy
IVAs popularity seems to be on the increase, with a 70% year on year rise in the number of people signing up. However, an IVA only suits a small number of debtors as you need to have debts of at least £12,000. Contact Harrington Brooks to see if an IVA is the right debt solution for you.
7) Have some discipline
Experts are advising customers struggling to repay debt to enter into agreements that consolidate all their borrowing into one loan. This can be a good solution, but only works if you stop spending. Also a debt consolidation loan is likely to be secured against your home, so you need to think seriously about this decision.
Stop using shopping as a form of therapy
If you idea of stress relief is a little, or a lot of retail therapy, it’s time to find another way to let off some steam. Start jogging, join a yoga class, walk the dogs – just stay away from the malls.