Debt, it’s one of those things that we often shrug off as somebody else’s worry.
Students hardly consider themselves to be ‘in debt’, despite the majority owing thousands of pounds in loan repayments. And over 4 million of us are living in our overdrafts month to month.
It’s an almost accepted way of life for some. For others, it’s much more serious. In fact, over 9 million of us in the UK are currently living with debt – severe debt.
Money Advice Service (MAS) researchers have found that 19.4% of those indebted are working families.
A ‘typical working family’ organises their money well, lives on a reasonable budget but struggles to move forward because of limitations put in place by debt.
- Mortgage Repayments
- Loan Repayments
- Insurance Premiums
- Credit card Bills
All come first on the working family’s list of financial priorities. And for many, the amounted debt across all these things means the majority of household income goes ‘unseen’.
So, is there a way out? Or is the relentless spiral of debt unescapable for all working families?
Well, there is one method proven to help – which I’ll get into in a second. But it’s important to note here that government-backed support for debt is available and, at the minute, just 17% of us living in the red currently access that support, according to MAS.
Three Ways To Get Out Of Debt
1: Ask for help!
The MAS study found that out of the 9 million indebted Brits, just 1.5 million are currently seeking advice.
The graph below shows that the majority of people would only seek support if their situation worsened.
Why the wait? Well, it’s largely down to control, trust and sometimes (understandably) pride. Less than 15% of people surveyed wanted to ‘hand over control of their debt situation’.
But there is genuine help out there right now. And to really pull yourself out of bad debt, it’s always advised to act sooner rather than later. Aside from MAS, here’s a couple of organisations you can contact today:
Citizens Advice Bureau
You may find what you’re looking for amongst their bank of online guidance but do call them too.
The bureaux will assign a real human being to take on your case. And this person will likely specialise in your specific type of debt problem.
Telephone Number: 08444 111 444
StepChange Debt Charity
A free to contact charity that’s been helping people recover from debt for over 20 years (largely under the name CCCS). Their mission is to become the most trusted debt advice service in the country. There’s also a free-to-use debt remedy tool on their website.
Telephone Number: 0800 138 1111
2: Take a closer look at your relationship with lenders.
Let’s go back to that typical ‘working family’ from earlier…. The couple owns their own home, uses credit cards and has taken out one or more loan in the past. To get by in modern Britain, there are few alternative ways to at least starting life as a homeowner. As MAS uncovered, this way of life traps people into relying on credit long term – and potentially living in a constant cycle of debt.
Still, all of these things (mortgages, loans and credit cards) have been notoriously mis-sold with payment protection insurance (PPI) by several major UK banks. And so, in theory, every ‘typical working family’ may have grounds to claim that money back.
Claims companies usually take around 25% of your compensation – but the legitimate firms work on a no win no fee basis only taking a fee providing they can secure a claim for you.
3: Use government help schemes.
If the MAS example of a ‘typical working family’ was struggling to meet their monthly mortgage commitments, then the government does offer support for that exact type of situation.
Now, there is no way the government will turn around and start paying the mortgage on your behalf but there are schemes like ‘Support for Mortgage Interest’ which can at least help cover the interest payments for a certain period of time.
Visit this website to view all the details.
You can help too
If you have any thoughts on getting out of debt or any more places from which people can seek support, then please share what you can in the comments below.
- Have you started clearing your debts?
- What help have your received?
- Does your loved one know how much your owe?
- Have you used the services of Citizens advice or the StepChange Debt Charity for money related issues?
- Do you have any “money” related New Years resolutions?
- If you have an outstanding balance on debts, will you be able to clear them in 2014?
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