Call credit says that the most recent numbers show that 8.2 million British adults now have a lot of debt. Research by call credit has shown that 60% of people in the UK don't know how much they owe to finance companies. Consumer Credit Counseling Services says that the number of people over 60 with debt problems is growing faster than in any other age group, and that by the end of 2007, they will be helping more people over 60 than under 25. This article backs up the research by http://unbiased.co.uk, which found that UK consumers don't realise how much debt they have. Six percent of British consumers, or two million people, are not sure how much debt they have. There are a few things you can do to get a better handle on your debts. First, you need to make a list of all the companies and people you owe money to. This includes all secured loans, unsecured loans, credit cards, and outstanding debt, such as your mortgage.
Then you need to divide the debt into two groups: debts that are important and debts that are not important. Put all mortgage, secured, and debts that you have to pay by law or as a priority, such as gas, electric, and water payments, council tax arrears, court fines, income tax, or VAT, in the priority debts list. And credit cards, overdrafts, loans, and hire purchase into debt that is not a top priority. You can't go to jail for not paying these debts, but you still have to talk to each creditor, explain why you can't pay, and offer to pay less. The next step is to make a budget. This includes figuring out how much money you make and how much you spend. The expenses are the money you spend on things like food, toiletries, and other things you need to live.
You put your mortgage and secured loans, building insurance, council tax, water, gas, and electric bills at the top of your list of debts. Then, when you add the two numbers together, you'll know how much you have left for your non-priority debt, like credit cards, unsecured loans, hire purchase, and all the other debts listed above. Once you have these numbers, you can make payment plans to your creditors for the debt you still owe. If you don't want to do this yourself, you can also hire a debt management company to do it for you. There are pros and cons to this, depending on how you look at it. The main benefits are that you only have to deal with one monthly payment to the debt management company and that they divide up the payments and deal with the creditors directly so you don't have to.
Most Debt Management companies charge up-front fees and a monthly fee for managing your debt, which means you end up with less money than if you did it yourself. Whether or not you use a Debt management company, it's clear that Debt is here to stay in the UK right now. Before you try to figure out how to deal with your debt, you should talk to an experienced advisor or the Citizens Advice Bureau for help.
