Debt can make you experience many different emotions. You may feel scared, despairing, ashamed, helpless, or guilty.
It is important not to hide from your financial difficulty, or to panic and take desperate measures. You have time, but you must face the situation head on.
Contact a debt counselling service. These organisations are free and they can help you to talk to creditors.
The Society and College of Radiographers recommends the charity https://www.stepchange.org/ as a first port of call, and a lot of the information given here is based on their advice.
The debt counselling service will inform the people chasing you for payment that you have contacted them and you are addressing your debts. This will provide a month's breathing space to get yourself on a better footing. The debt collectors should stop contacting you during this period.
Other benefits of using a debt counselling service is that they can:
They will show you how to prioritise the most important debts to enable you to keep food on the table and a roof over your head.
If there is a delay in arranging an appointment with a debt counselling service because they are busy, use the information on their websites to start to plan.
Companies that advertise consolidation of debts, or other debt assistance, are commercial organisations and should be avoided.
Prepare a sheet that shows your income and assets and your outgoings. You will need this to show creditors, or a court, to provide information about your circumstances and to help plan what you can pay towards your debts.
There are budget planning guides online or organisations that will help you to do this.
What is going to happen to me?
This depends on what action you take. If you ignore letters, do not contact your creditors, and do not take steps to reduce your debt (however hopeless you feel that might be), you will be subject to legal action.
If you look at the problem calmly, prepare a budget and get appropriate help, then the chances are that you can start to get yourself out of debt, however long that may take.
What can my creditors do?
Creditors are aware that if you don’t have money, then you can’t pay. They will assume that they are unlikely to be the only people to who you owe money and they will be keen that you pay them before anyone else. They may make false claims. It is important that you understand your legal rights, as well as what rights creditors have to recover a debt.
The law indicates that creditors should not call ‘excessively’, but there is no set limit. They should also not call at unreasonable hours, but again it is not specified what is ‘unreasonable’. You are entitled to complain if you feel a creditor is harassing you. You might find it easier to use caller display, or silence your phone, if the calls are upsetting or disturbing you. Creditors mustNOTcall you at work if you ask them not to.
In general, creditors are practical business people. They want their money and if you can’t afford to pay the debt in full, they want what you can pay. Forcing debtors into bankruptcy is expensive for a creditor, and they are unlikely to take this step unless you have significant assets. What creditors hate most is debtors who won’t communicate with them.
Financial problems have an emotional toll. Coping with debt can be very stressful and many people have already suffered because of the events that precipitated the debt problem in the first place.
Take steps to reduce anxiety as much as you can:
If you feel overwhelmed by your problems, visiting your GP might be helpful. The Samaritans are also recommended. They provide support not only for people who are suicidal, but for anyone who needs to talk. They can offer practical advice. https://www.samaritans.org/
Most people in debt feel better once they have taken the steps to get help and sort out their financial difficulties.