Today is a real troubleshooting sort of day – if you have any debts, now’s the time to really take control of them. If you don’t have any debts then there’s an alternative activity for you at the bottom of the page.
Now, on with the debt busting. Do you have any of the following?
- Credit card debt
- Store card debt
- Mortgage or rent arrears (up-to-date mortgages don’t count today)
- Payday loans
- Money owed to loan sharks or doorstep lenders
- Other loans (student loans don’t count today)
- Money owed to friends or family
- Unpaid/overdue utility bills
Make a note of how much you owe, and alongside each debt also note down the interest (usually this is the ‘APR’). Also note down any debts where you have overdue payments or are being charged penalties and fines – write down how much any fines are too.
Rank your debts in their order of urgency. The higher the interest, and/or the bigger the fine for late payment, the more urgently this debt needs to be repaid.
Is your total debt, say, less than an a month’s wages? If so, write out a plan of how you might pay it off over the next few months, ideally paying off the most urgent debts as a priority (this generally saves the most money in the long run).
The Debt Remedy Tool at the StepChange debt charity website is a very helpful way to start sorting out a debt problem. It takes about 20 minutes to use it, and is well worth the effort.
If you are:
- scared about the amount you owe
- unable to keep up your repayments
- being threatened with bailiffs or other action
– please get some extra help and support from a non-profit debt help organisation such as StepChange or your Local Citizens Advice. Avoid commercial debt consolidation companies that will make a profit from your problems.
Writing to your creditors can get out-of-control debts frozen, or a more manageable repayment plan can be agreed. You may also qualify for all kinds of help, discounts and benefits.
What’s happening here?
I only have one debt, a small amount on a single credit card. My income is irregular as I’m a freelancer, but I’m aiming to pay it off within the next 12 weeks – could be sooner, depending on clients.
If you have no debts
Congratulations! Well done indeed. Today you could:
- Commit to making regular savings
- Find a better rate for any savings you already have
- Find out whether you can pay off a mortgage early
- Look into pensions or investments