The truth about bankruptcy
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When you’re young and struggling with debts you can’t afford to repay, it can feel as though it’s the end of the road for your finances. It doesn’t have to be as there is help available.
Young and in debt: what can you do about it? Part 2
Following on from from part 1, part 2 is going to look at what you should and should not do if you’re in debt.
What you shouldn’t do…
In a couple of words – borrow more! If you are struggling financially it isn’t a good idea to take out more credit to cover the repayments on what you already owe. This will almost certainly make the problem bigger, rather than smaller, and it’s likely to add to your stress levels as well.
What about payday loans?
Thankfully, due to tougher regulations on how much they can charge, many payday loan companies are disappearing and those that aren’t have had to change how they operate. Why do we say thankfully? Well, because they charged very high interest rates, even if you paid back what you owed in the stated time, making it a very expensive way to borrow. If you are struggling to make your repayments on existing loans and credit agreements, or struggling to cover essential bills, such as your rent, council tax or gas and electricity then a payday loan might seem like an easy stopgap. But we’d never advise that you use payday loans to fund your existing debts. There is a better way – trust us!
What you should do…
The fact is, no matter how they’ve occurred, juggling lots of debts can become confusing very quickly. You have to make sure that everyone is paid the right amount at the right time, or you risk racking up additional charges and interest, which only makes your debt bigger and bigger. Even if you’ve only got one large debt, you still might worry about finding the money to pay it each month.
If this starts to happen, it can feel like you’ll never pay it off and it’s not unusual to feel helpless and stressed. If this persists, you could find your health starts to suffer as a result of the strain. But, as we’ve said already, there is always a way out.
No matter what caused you’re money troubles, there’ll be a solution to suit you. The trick is to get the help you need sooner, rather than later. The one thing you should try not to do is ignore the situation and hope it’ll go away.
If you’re worried about a debt – or several – that you can no longer afford to pay, it’s important you seek help as soon as possible. You can go to a debt charity, the Money Advice Service, or a debt advice and solutions provider. They’ll chat with you about your current situation and offer advice on the solutions that may help you take control of your finances again. Plus, they say a problem shared is a problem halved, so you may find that just letting it all out makes you feel better already.
Getting out of debt
Different debt solutions will be appropriate depending on your circumstances and all debt solutions come with pros and cons. For example, they will allow you to reduce your payments to an affordable level, but this may mean it takes you longer to clear your debts overall. Your credit rating may also be damaged, which could make it more difficult for you to get credit in the future. A trained debt advisor can tell you more about each solution and if it’s appropriate for you. You can find out more about all of these solutions by contacting us using one of the buttons on the lefthand side of the page.
by Shelley BowersBack to blog home