We all know how January can often be a difficult month to get through financially, the festive season can often leave us feeling strapped for cash. With many people having been paid early in December, the end of January can sometimes feel like a lifetime away.
You’re not the only one in debt
At the beginning of 2020 there were around 9 million people in the UK who were over-indebted. Due to the impact of Covid-19, this figure has likely increased drastically. So, there’s no need to be ashamed, there are plenty of people who are in the same or a similar situation as you. What’s important is that you don’t bury your head in the sand and ignore your debt issues, as they will only get worse if you ignore them.
If you’re struggling with bad debt this January, here are some steps that you can follow to help you get your debt under control:
Make a list of your debts
You should always start by making a list of all your debts. We know this may be quite overwhelming, but facing what you owe will help you in the long run. For each debt, we recommend writing down exactly how much you owe and when the first payment was missed. It may also be beneficial to write down what the creditor has done to try and recover the money. For example, letters or court orders. You should also check your credit report, and make sure it is accurate. For example, if six years have passed since you have made a payment or have been in contact with a creditor, you may not have to repay the debt.
Prioritise your debts
Your next step would be to work out which debt you should pay first. Some debts have a higher priority than others when it comes to repayments. Things like rent or mortgage arrears are usually at the top of the list, since you risk being evicted if you do not pay them, whereas things like credit cards or store cards fall closer to the bottom of the list as they can sometimes be more easily negotiated with your credit provider.
A secured debt will generally always be more of a priority than an unsecured debt, this is because the consequences for missing a payment will be much more severe if you fail to make repayments on a secured debt.
Set a budget
A budget is a helpful tool that could help you manage your debt. A budget will help you work out how much money you can afford to pay each month.
If you’re struggling to create your own budget, check out our FREE personal budget tool in Excel here.
Seek professional help
If you are really struggling to manage your debt, then you should seek professional help. When debt is unmanageable, there are debt solutions that can help you to regain control of your finances. Take a look at the debt solution section of our website for information on the various options available to suit your needs or request a free callback for non-judgemental guidance.
At Debt Movement, we understand the worry and stress that can be felt when you’re in debt. We know that bad debt happens to good people and we’re here to help — our expert guides are extremely knowledgeable in all of the different types of debt help available and the criteria that need to be met for each debt solution. Request a free callback today!
