Being in debt is a terrifying experience, especially if by being in debt you risk losing your home or other important items. Once you are in the debt arena, often the experience feels somewhat like being in danger: aggressive letters start pumping themselves through the letterbox, legal threats are being made, and every financial source of help seems to close down on you, so that you are left with a feeling of nowhere to go. Anxiety and panic tend to set in around this stage, until the person who is struggling with the debt either breaks down completely or says good-bye to their possessions. It doesn’t have to be this way. Today we are going to explain how to start getting yourself out of debt.
1.) Understand that this is a process
Getting out of debt is a process, and like any process it has a beginning, middle and an end. The beginning of the process is to organize your debts into categories and have a good look at them so that you can build a get out strategy. All lenders are open to listening, so hiding away from letters is the worst strategy that you can employ. Step one is to organize your debts according to urgency, so more urgent debts like overdue mortgage payments should be prioritized and less urgent debts can go lower down the list.
2.) Contact the people you owe
Good communication is key to every success no mater what the situation. Communicating with your lenders is key to reaching an arrangement. Most of the letters your lenders have to communicate with you will have a contact number on them. Call them up, and explain to them that you would like to come to some form of repayment term so that you can repay your debt. Because you have communicated, your lenders will then speak to you about what is management. Ultimately, lenders want their money back and if that means dropping repayments from thirty pounds per month to five pounds per month: they will accept it. Lenders can also freeze interest on your debt for a period of time, and give you a repayment break to help you accumulate some funding in order to help you repay. All of this process begins with communication, so don’t be afraid, pick up the phone and speak to the people you owe.
Although using debt to get out of debt can create more problems, if you are really committed to getting out of debt then consolidation can work for you. Consolidating your debt means taking out a single loan that will repay all of the money you owe, leaving you to pay a single lender. This option can provide relief, especially if you are receiving letters from many lenders and can’t keep up. The only danger is jumping into a loan that has harsh repayment conditions, so watch out for that hole, avoid it: and you should be ok.