Even if you decide not to share the details of your debt problem with your friends and family (and I would seriously suggest that you ought to do so with your close family) you still need to have an outlet for all your concerns and emotions. This should help you to keep your problems in perspective and makes it more likely that you will be able to find a solution to your problems.

In my case the two people that I discussed my problems with most were my sister and my doctor (as I was depressed at the time). My sister provided non-judgemental support and I really looked forward to our weekly conversations. The experience of discussing my problems with my doctor was similar, but he was totally detached from my situation so in some ways it was easier to talk to him. Both were invaluable as I battled to solve my debt problem.

So who should you choose to help you through your debt problem? It could be a family member (ideally one not directly affected by your problems), a minister, a close friend, a doctor or even a debt support group. You need to make sure that whoever you choose is able to listen to your problems and offer advice if requested without being judgemental. They also need to be available and willing to help you. My experience of asking my sister for help was that she was pleased to be asked (although of course a little sad at the state I had got myself into).

Once you have started discussing your problems with someone you must keep on assessing whether this is helping you or not. If it isn’t working for you then never be afraid to stop the conversations (politely of course).

photo credit: milena mihaylova

When people give advice it is usually affected by their own prejudices and interests. Therefore if you are in debt and looking for credit advice and debt help in the UK (or elsewhere), individuals might tell you that you need to struggle to pay off your debt. This could be because they have not knowledge of debt relief procedures or that they resent the idea that people can be relieved of some of their debt.

Any companies that you get advice from will be influenced by the solution that they are selling, and how much money they can make out of it.

Even charitable organizations will be staffed by people who take their own life experience (and their record of success or otherwise with particular debt solutions) into account. It takes a very skilled debt counselor to completely ignore their own experiences and judge a debtors situation objectively.

This is why that I think that it is essential for people in debt to find out as much information about the various solutions (Debt Management Plans, Individual Management Plans, Bankruptcy etc.) as they can. I also strongly recommend that they get help from a qualified adviser. If the debtor has read widely on debt solutions then they are more able to work towards a satisfactory debt solution with their adviser than if they simply rely on the adviser to tell them everything. It is a case of using your debt adviser as a resource to achieve the most suitable debt solution for you rather than surrendering all control over the situation.

In my own personal debt crisis I had decided that a Voluntary Individual Arrangement (IVA) was the best solution for me, even though the debt advice company that I consulted initially suggested an informal arrangement. I persisted asking for my preferred solution and in the end they agreed. This was actually the method I ended up using to become debt free.

photo credit: eric731

Debt is the word seemingly on every one’s lips. Whether it be concerning governments, financial companies or individuals everyone is interested in whether they have too much debt. With the economic situation going from bad to worse it is worth reviewing your situation to see if you have too much debt and whether you are (or potentially could in the future) be in a debt crisis situation.

Debt Early Warning, Debt Problem, or Debt Crisis?

There are no exact definitions here, but I’ll have a go at defining these states and the likely outcomes if you do nothing. Also what steps you need to take to get yourself free of debt.

Debt Early Warning

Do you worry about the amount of debt you have (whether secured or unsecured). Is it starting to represent a significant proportion of your monthly budget? (If the word budget is a strange one to you then you have more work to do before working out how serious your debt problem is). Can you only afford luxuries like holidays or meals out by putting them on a credit card? If you answered yes to any of these questions but you are still making all your regular payments then I would suggest that you are at the “Debt Early Warning” stage. You really need to do your monthly budget and a monthly balance sheet of all your debts to see if your debt situation is getting worse or better. If your monthly budget shows a deficit or your your monthly total of debts grows each month then prompt action is required to get your situation under control. Do nothing and you are headed down the path to debt problems and crisis. Trim your spending until your budget shows an excess of income over outgoings and your debt total decreases each month. You will have started the path to being debt free.

Debt Problems

Does your debt problem stop you sleeping at night? Are you cutting back on essentials such as food and clothing to pay your debts? Can you only make the minimum payments on your debts by borrowing more? Answer yes to any of these and you have serious debt problems. If you have reached this stage then the most likely outcome is that you will need to use a formal debt solution, such as a debt management plan, Individual Voluntary Arrangement or bankruptcy. However if you do your budget and work out that you can make your monthly payments without starving yourself then there may be a (long) road ahead of you to becoming debt free. I would seriously suggest getting some free debt advice to consider your options, as what many people consider to be the honorable thing to do (struggling to pay off their debts) can actually be very harmful to you and your family in the long-term.

Debt Crisis

Have you started missing payments on your debts? Do you struggle to feed your family or pay other basic bills? Have threatening letters and phone calls started? If so, then you are most definitely in a debt crisis situation. You need to get good free debt advice URGENTLY to plan your escape from this situation. Putting off getting advice is only prolonging the misery and puts off the day when you can be debt free. You are most likely to need a formal debt relief solution, but consult with a qualified advisor before doing anything else.