With the frenzy of festive preparations and celebrations fading into the dim and distant past what are we left deal with I hear you ask! Bills bills and more bills! It’s tricky isn’t it? Weeks of shopping, spending large amounts of money to ensure our nearest and dearest get to have the Christmas we believe they deserve whilst turning a deaf ear to that internal voice warning us to reign in our spending, or suffer later. So, what happens after when the inevitable credit card and bank statements drop onto the proverbial mat? Lift it up and hide them underneath? Or bite the bullet and open them up? Open them of course; to ignore them will lead only to more demands, chaser calls & more stress. 

Your creditor wants to collect what is owed for sure, but in the event that you cannot fully meet your obligations your creditor wants and needs to know that too. How else can they help? To leave them in the dark just means the situation escalates, the debt increases, your credit standing is eaten away by poor ratings, you may be passed to a collection agency or solicitors…and did I mention the stress part? Of course you may be one of those lucky people who prepares well, saves regularly and spends only what you can afford over Christmas, but if you are not, then it is key you make arrangements to keep your creditors happy in a way that allows you survive pay day to pay day without further borrowing. 

 The best way to do this is to be completely aware of both your income and your outgoings, can you cover all your outstanding repayments against your loans and credit arrangements as well as living expenses exactly as you are currently contracted on you current income? Not sure? Don’t think so? Write it down. Income on one side of the page including any family allowance, pensions benefits etc and all outgoings on the opposite side, be realistic, and don’t over egg the amounts, your creditors know what is realistic and moreover acceptable and will challenge any overspend, but don’t under estimate either, or you’ll not be able to manage on what you wrote down. 

 You now have two totals, minus the income against the outgoings, if you have available income you are in a reasonably good place and we salute you! The same total on each column means you are potentially living beyond your means but hopefully you factored in contingency money for emergencies if not be aware of how precarious your situation is and take steps to remedy it, forewarned is forearmed. Lower income than outgoings? You must address this and let all your creditors know you are in financial difficulties. You will need to rework your income and expenditure to separate essential living expenses from creditor expenses so that you can make a reduced offer to the creditors evenly distributed based on debt balance, i.e. if the highest balance is 20% of your total debt then you pay them 20% of your available income. 

You will then need to send this information to your creditors along with a payment to show your intention is to clear the balance and don’t forget to request to freeze charges and interest. If this all seems rather daunting then worry not, there are several charity based organisations* happy to help you prepare an income and expenditure schedule and contact your creditors on your behalf for no charge (and many more that will do the same whilst making a monthly charge) and once you engage with one of these companies your creditors will be happy to liaise directly with them all the time you are making payments through them, removing some of that stress I mentioned earlier. On no account do nothing, if your creditor instructs a solicitor to take you to court you will end up paying costs and interest, could even lose your home, be declared bankrupt, have your employer instructed to take payments directly from your salary or recover goods to the value of the full debt. None of these options is good. 

By taking responsibility for your own finances and dealing in a responsible way with your creditors you can avoid a lot of stress and hassle and maybe retain a reasonably good credit record for when you finish making your payments. Your creditors WANT you to deal with them…so what’s stopping you? * HELP AND ADVICE FROM INDEPENDENT ADVICE ORGANISATIONS The following organisations offer advice free of charge CITIZENS ADVICE www.adviceguide.org.uk or see Yellow Pages NATIONAL DEBT-LINE Phone 0808 808 4000 or www.national.debtline.co.uk STEPCHANGE DEBT CHARITY Phone – 0800 138 1111 or www.stepchange.co.uk Money Advice Service Phone 0300 500 5000 www.moneyadviceservice.org.uk