The truth about bankruptcy
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Answer a few simple questions
See if you are suitable
Understand your next steps
Make sure you don’t have to pay any extra on what you owe.
Dealing with a lot of different debts at once can be really difficult. You can feel like you’re constantly juggling payments and if you accidentally miss one, late payment and arrears charges can start to build up.
But it doesn’t have to be this way – you can avoid any extra costs on your debts. Here’s how to make sure you don’t get any extra fees – so you can clear what you owe faster.
Pay on time
It might sound like an obvious solution but the best way to make sure you don’t have any extra charges on your debts is to always pay what you owe on time. If you make at least the minimum payment every month, your lenders won’t add any fees to your balance.
Only just starting to struggle with your debts? It’s a good idea to take a look at your budget and see if you can free up some extra money. That way, you could stay on top of your debts and avoid any charges.
And if you’ve got any savings, you’re probably best putting this towards clearing your debts. This is because the interest you’ll earn on any savings will usually be lower than the interest (and any charges) you pay on loans or credit cards – so it’s cheaper to use it to make sure you avoid charges.
Speak to your lenders
If you are already falling behind with debt repayments, cutting back on a few bills probably won’t be enough. In this case, you should speak to your lenders to let them know you’re struggling.
We know this can be scary and you might even worry that your lenders will be angry at you or won’t want to help you. In fact, the rules set out by the financial watchdog, the FCA, say that lenders have to do all they can to make sure you don’t end up in financial difficulties, and to provide help if you ask for it.
By speaking to your lenders, you could set up a new repayment plan or even agree a payment break for a couple of months – until you get back on your feet. And, once you’ve told them that you are in financial difficulties they will often stop adding extra charges and interest to what you owe.
Get help with your debts
If you don’t feel confident speaking to your lenders yourself or you’ve already started to get a few charges, it might be best seeking help for your debts. A debt advisor could speak to your lenders for you and help set up a new payment plan – so you can clear what you owe at a level that’s affordable for you. And, in many cases, once you’ve started your debt solution you won’t have to pay further interest and charges, so long as you stick to the terms of your solution.
by Emily BancroftBack to blog home