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debt and mental health Debt & Arrears What Service Users Want Health Workers To Know & Do


debt forum uk

Top 10 debt tips

Taken from The Source

1. If you find yourself in debt and are having difficulty managing it, notify your lenders. It's better to let them know in advance of problems so something can be worked out.


2. Shop around when you want to borrow money to find the best possible deal.


3. If you don't want to borrow against your home, look for an unsecured loan.


4. The longer you borrow for, the more in interest charges you will end up paying.


5. Some lenders may offer a loan and then defer payment for the first three months. Remember that 

you will still be paying interest on the amount of money you will borrow.


6. If you pay back a loan early, some lenders charge an early redemption fee. Find out before you borrow if there are any penalties if it is repaid early.


7. If you are experiencing debt problems, contact your local Citizens Advice Bureau who can offer help to reduce what you owe.


8. Beware of lenders who knock on your door offering small loans. You could easily be paying back huge sums of interest to loan sharks. Never sign for a loan without reading the small print.


9. If you are in debt more than you can afford, start cutting up your credit cards to avoid any further temptation.


10. If you are going to consolidate all your loans and debts into one bigger loan, make sure it is the only one you take out. That way you can manage the one loan and not have to worry about further debts.

Top 10 credit tips

Using a credit card, instant credit in a shop, catalogue shopping, using a store card - when it comes down to it you're borrowing money. If you're going to use credit these ten tips will help you to borrow safely.

Prepare yourself

1. Can you afford it? Before you commit yourself make sure you can really afford the repayments - don't be talked into borrowing more than you want to.


2. Shop around for credit. The first thing you're offered may not be the best deal. There are many types of credit and numerous rates on bank loans, credit cards, hire purchase agreements and so on. Don't pay more than you need to.


3. Read the forms before you sign. If you don't understand them get help from a trading standards office or Citizens' Advice Bureau. Once you sign you can't change your mind - unless you sign at home or at some other non-business premises.

How much will it cost?


4. Check exactly how much you'll pay back including interest and charges, is it good value?


5. Compare the APRs. This is the easiest way to compare similar credit products - so if you're looking at credit cards, for instance, go for the one with the lowest APR. Usually the lower the APR the less you pay in interest. Sometimes a low APR is only offered for a short period.


6. Watch out for other charges such as broker's or arrangement fees.


7. Look at the length of the loan not just the monthly payment. The longer the loan period, the more interest you'll pay back.


8. Watch out for optional extras. Sometimes payment protection insurance is included when you haven't asked for it. You don't have to take this up and it may not cover you if you're self-employed or on a short term contract.


Be aware


9. If you use your home as security for a loan and you don't keep up repayments you could lose it.

1

0. If you act as a guarantor for someone else's loan you will have to repay the debt if they don't. If you borrow £1000 at an APR of 25% for 5 years you'll pay back £1675 (that's an extra £675 in interest).

Taken from The Source

10 Top Tips about debt taken debtline uk

Communication

1. Communication is the key to successful negotiations with creditors. Do not ignore their letters. Answer them promptly by letter or by telephone. If you promise to contact someone by a certain date, make sure you keep your promise and contact them even if only to tell them when you are going to make a payment to them or advise why there is a delay.


Mind your manners

2. It never pays to get angry with anyone, even when you feel justified in doing so. Always be polite and courteous even in the face of being treated rudely. It takes the wind out of their sails. If someone is acting negatively with you and you react negatively, it always makes the situation worse. As a debtor your objective is to persuade someone to be sympathetic to your circumstances.


Don’t take any nonsense

3. Don’t take any nonsense from anyone. 100 years ago we used to have debtors prisons in the UK. If this was the case now we would not have enough prisons to house even a small proportion of debtors. The worst that can happen is that a creditor will obtain a judgment against you and take money from you on an involuntary basis, which you can avoid through several ways explained on this website. If you are being harassed by a creditor or a company employed by a creditor take the name of the individual and report them.


Get it in writing

4. Always create a paper trail. This starts with your records such as invoices, credit card statements etc. Every telephone call, letter written/received and offers made. Always make a note of the date and time and to whom you have spoken and if necessary confirm all conversations or offers in writing.


Don’t bluff

5. If you make an offer, make sure that you can do what you have promised. Don’t tell creditors what you think they want to hear. Tell them what you really can do and then follow it through.


Don’t threaten creditors with bankruptcy

6. Most creditors and their agents hear these types of threats every day. It is a form of stonewalling that hinders negotiations. Creditors are likely to become more aggressive and their standard reply is “go ahead and file”. There is a way to do this indirectly in the context of portraying adverse financial circumstances, with an inference that bankruptcy is a possible alternative in the event that the creditor does not accept your offer.


Make your offer as brief and precise as possible

7. Explain the reasons for your current financial difficulties and then come to the point and make the offer. Make the terms of the offer precise. Do not leave things open ended such as “things should pick up during Christmas and I will increase my payments if I can”.


If you get into trouble

8. If you get into trouble after you have negotiated an offer and you can’t adhere to the arrangement, contact the creditor in advance. Attempt to send a portion of the funds you promised with a proposal to make up the balance, or renegotiate the entire proposal. Do not wait to contact the creditor until after you have missed a deadline for payment.

Protect yourself


9. If you receive Court or official papers, protect yourself. Make sure you know how much time you have until a legal response is required to be filed with the Court. This is usually set out on the Court or official papers. Consult with either an insolvency practitioner or a solicitor regarding your rights or the means to resolve the claim without going to Court. If you contact the creditors or their agent and start negotiating the claim, make sure the response deadline is postponed to a date that you can keep to. This postponement must then be confirmed in writing.


Be realistic

10. Always be realistic with your offer. Only offer what you can actually afford. Ensure you complete your statement of means as accurately as possible, not forgetting expenses such as school expenses, child minding, cigarettes, TV licence etc. Do not however insult your creditor by over estimating your expenses, such as entertainment, dining out etc. The majority of creditors are fair and they will expect realistic payments within your budget.

Above all don’t panic, don’t bury your head in the sand, face up to your problems and follow our guidance to resolve your financial dilemma.