5 steps to regaining control over unmanageable debt
Once you’ve realised that your financial situation is out of control, there often seems no way out. However managing your way out of debt through a debt management plan, usually follows a 5 step proces
5 steps
- Seek advice
- Assess your current
financial situation
- Involve creditors
- Seek agreement
- Stick to it!
It may seem too simple, but
these five steps are the foundations of managing your way out of debt.
- Seek advice. Perhaps the hardest step for many people.
Many people say that admitting they have debts is the hardest to come to
terms with, perhaps because they may have feelings of shame. This is,
however, the most important step to take. Debt advisors are available to
speak to and, if you call us, our advice and recommendations are free.
- Assess your current financial situation. Getting a clear understanding of your
financial situation is the next step to managing your debt problem. A debt
advisor will help you do this and will go through all your debts and
credit agreements and prioritise them. Then they will work through details
of your monthly income and living expenses. The professional debt advisor
will then be able to advise you on the most appropriate solution based on
your individual circumstances.
- Involve creditors. At this stage, if you haven’t already done
so, you need to let those you owe money to, i.e. your creditors, know
about your plan, because they need to agree with it for it to work.
However, if you decide to work with a debt management company, even
better, because it’ll speak to your creditors for you about this.
- Seek agreement. Most creditors are open to working out a
plan with you and debt management companies to repay a debt that’s got out
of hand. Their view is that it’s generally better to get a smaller amount
back regularly, than next to nothing or nothing at all.
- Stick to it! Once you’re paying into your plan, you
must stick with it. Although it might be tempting to stray, don’t!
Whilst we make every effort to ensure this article is
as up to date as possible , Accuma cannot be held responsible for changes in
legislation or developments in case law since this article was produced and
published. Article produced 8th July 2008.
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