Tag Archives: debt management

How to Control Anxiety Over Bad Credit

It’s not uncommon to find yourself in a poor financial situation. Layoffs, underperforming investments, unforeseen expenses, and budgeting mistakes can all lead to issues with managing your finances, and when those issues start to cause debt, it can lead to bad credit.

Bad credit affects people more than just financially. It can also lead to a great deal of stress. Those that are suffering from bad credit often feel as though their lives are going to be forever changed – as though they will be unable to overcome their credit issues.

This can cause a lot of stress, and indeed, it appears as though many people suffer from anxiety issues because of their financial situation. That’s why it’s important for your mental health to control this stress while you rebuild your credit.

Tips to Control Stress Due to Bad Credit

· Create a Financial Plan

Easily the most important tool for controlling your stress is to have a plan in place to rebuild your credit. Your budget should be planned out as best you can, with details that will ensure that you keep to it. Financial planning gives you an eye towards the future, and it shows you how you’re going to make sure that your credit score sees genuine improvement over time.

· Create an Emergency Account

Related to creating a financial plan is creating some type of emergency account that you can use to pay off bills in the event of an unforeseen expense. It’s not just planning for the unforeseen expenses – it’s also preparing for the other bills you need to pay in order to keep rebuilding your credit. When you have this emergency account, you’ll find yourself less concerned about what happens if something comes up financially.

· Learn Proper Credit Strategies

It’s also a good idea to take some type of credit class or research smart credit decisions. When it comes to controlling your anxiety about your finances, knowledge provides a great deal of power. As long as you know what the right decision is each time, you won’t doubt yourself and you’ll be far more confident when you’re dealing with your debt.

· Organize Your Bills and Bill Pay

Organization is also an important tool for reducing the stress of low credit. You know that you’ll have to make every payment from now on, and if you’re still finding every bill and forgetting which ones are due when, you’ll put yourself in a position to panic. Sign up for bill pay when possible, and make sure that you have some type of reminder calendar to ensure that you make each payment on time as needed.

· Find Free Finance Hobbies

Finally, it’s helpful to get a little bit of extra money in your pocket when you can, in order to fund the emergency fund and decrease the stress you experience over finances. See if there is anything you can do for free (no financial investment) to earn a bit of extra money. Even something like mowing lawns or starting a blog can be beneficial. You may only work a couple hours per week on these projects and make very little, but that extra money can fund your account and reduce some of your financial stress.

Controlling the Anxiety of Poor Credit

One of the main reasons to have good credit is so that you can improve your quality of life. But if you’re letting the stress of overcoming your poor credit impact the way you feel, then you’re not experiencing that quality of life you crave. Use the above tips to reduce anxiety while you rebuild your credit and you’ll find that you’ll not only improve your credit score – you’ll improve your life as well.

About the Author: Ryan Rivera experienced significant stress from his financial decisions. He has a website about controlling anxiety at www.calmclinic.com.

Take Steps – Keep the Debt Collectors at Bay

A credit card is something that we all have and need. Be it an impulsive shopping spree or an unforeseen medical expense, a credit card has always been our friend. The importance of a credit card can hardly be overstated.

The problems begin when you start receiving the bills. If not paid on time, they turn into debt and then into nightmares that refuse to leave you even in your waking hours. But being a defaulter doesn’t mean you can be harassed by the debt collectors. You have the right to fight them back. Given below are some of the steps that you can take.

Find out exactly who is harassing you. Once done, start collecting evidence. If they are calling you it’s important to keep a note of the calls along with the time, duration, the name of the person you talked to and the gist of the conversation. Save all the mails pertaining to the debt. This is very important when you file a formal complaint.

Begin by complaining to the lending institute directly. If it does not solve the problem then you can lodge a complaint with a professional body.

The credit card company might also be a member of the Trade Union that abides by a Lending Code. If the lender is violating any of the codes then you can lodge a complaint with the Trade Association against them.

If a solicitor is harassing you on behalf of the lender then it will be categorized under professional misconduct. For this you have to go through the formal complaints procedure of the law firm. If they do not take any steps against the solicitor then you will have to lodge a formal complaint regarding credit card harassment with the legal associations that operate in your area.

If you are in the right then the law is on your side. Go ahead and claim the peace of mind and dignity that you are entitled to.

This guest article was submitted on behalf of the Consumer Law Firm Centre – Find out more about credit card harrassment.

Working out a debt management plan can be tricky - whether you're considering an IVA, a debt consolidation loan or a debt management plan.

Debt can be quite overwhelming – especially if unexpected changes to your personal circumstances have an impact on your income or if you have to end up paying out more than you are able to on a regular basis.

Many of us have been there – you can only tighten your belt so many times before you’re faced with a spiral of debt. Fortunately debt management programmes can offer a way of controlling debt – especially if you are facing endless payment demands.

Debt management helps you to manage your debt more effectively and gives you the breathing space you need to repay outstanding debts and get your spending back under control.

Whilst debt consolidation is probably the best known debt management plan there are other types of programmes, including a standard debt management plan and an Individual Voluntary Agreement. Let’s take a few minutes to look at the three different plans available and the merits of each:

Debt Management

A debt management specialist will work with you to take an in-depth look at what money you owe and who you owe money to. They will then talk with the companies you owe money to, and try to get them to freeze the mounting interest payments so that your debt doesn’t worsen. They will then ask the creditors to accept regular, sometimes smaller repayments (in some cases they may even be able to write off some of the debt).

Debt management specialists will handle all letters and demands for payment from your creditors, which can also really help to relieve the stress of debt.

The debt expert will also help you to work out what your monthly income is and what you can reasonably allow for living expenses, to show what you can realistically afford to repay. In addition to this they will help you to allocate that money between your creditors. The idea is that you will only make one affordable payment each month, and the debt management company will use that payment to make payments to various creditors on your behalf.

It should be noted that there are no guarantees that the firm you owe money to will agree to freeze interest rates or reduce your regular payments, let alone write off any of your debt. In some instances companies may still charge additional interest or penalty fees.

Whilst your monthly payments may reduce, you could end up paying a larger total amount over a longer period of time, in order to make it affordable for you.

Debt Consolidation

Debt consolidation works in a very similar way to a debt management plan. The emphasis is on “consolidating” all your existing debt into one manageable repayment plan. This is known as a “debt consolidation loan” - this includes all debts plus and early repayment fees you may incur. So all your existing debt is essentially paid by the debt consolidation firm so your only obligation is to pay them a manageable lump sum every month.

Individual Voluntary Agreement

In addition to these two there is something known as an “Individual Voluntary Agreement” (IVA) that is a more formal acknowledgement of your financial difficulties, however, it works in the same way as a standard debt management plan.

An IVA is essentially a legal agreement between the creditors and yourself. You basically agree to repay the debt over a set period of time (around 5 years on average). By the end of that agreed period your creditors will accept that they cannot obtain any further money from you – even if you haven’t repaid the debt in full.

If you are struggling with debt its worth looking at what your options are and, if necessary, look at a debt management / consolidation plan to help you meet the demands of your creditors.

Payday Loan Debt – How To Deal With It

Whilst payday loans can be a great way of helping you meet unexpected bills or helping to cover unforseen emergency costs over the course of the month, as well as a very convenient, quick way of getting a short term loan, there is always the risk of getting into debt easily, especially with the high interest rates associated with payday loans.

But what can you do if you do get into payday loan debt? Check out our top tips:

1. Work out a payment plan with your payday lender. Believe it or not payday loan companies do not want you to get in trouble with debt – it looks bad for them and it’s not so great for you. Most compliant payday lenders will work out a reduced repayment plan to help you meet monthly costs. This is what’s known as a “deferral” in the payday loan business.

2. Work out your monthly budget. Try to work out what your monthly outgoings are (i.e. utility bills, food costs, travel costs, etc), excluding your payday loan debt. Then simply subtract your outgoings from the overall amount you take in every month. That leaves you with a pot of money that you can dip into to repay debt – but remember you should only pay back what you can afford.

3. Cut out those things you don’t need. It’s easy really – by cutting out things like that weekly take-away, that 4 pack of beer or other luxuries, you will have more left over at the end of the month. More money that can go towards repaying your payday loan debt.

Remember – never ignore your debt thinking it will just go away. That’s not going to happen. If you’re struggling with payday loan debt then you need to face it head-on and resolve it as quickly as you can.

In addition to this you should avoid borrowing any more money until your existing debt is repayed. That doesn’t just include payday loans but should also include bank overdrafts, credit cards, unsecured loans and other forms of credit.

If you do end up taking out additional loans or borrowing money on your credit card you could end up with debt that is simply unmanageable. In which case it is important that you seek the guidance of a debt consolidation expert. If you are looking for debt consolidation services then you should look to the likes of a debt management plan to help you out.

Mortgage holders and tenants are turning to payday loans, credit cards and short term loans to help meet the monthly costs.

A survey by homeless charity Shelter has revealed that almost 1 million mortgage holders took out payday loans to help meet mortgage repayments last year.

The survey went on to reveal that a whopping 7 million people in total were dependent on some form of short term loan, credit card or unauthorised overdrafts to help meet the costs of their mortgage or rent.

Shelter have suggested that by turning to the likes of payday loans or credit cards could well see more and more people spiralling into debt.

The Charity’s CEO, Campbell Robb, commented:

“Every two minutes someone in Britain faces the nightmare of losing their home. We urge every single one of these people now relying on credit to urgently seek advice.”

Creditwindow suggests turning to the likes of the Consumer Credit Counselling Service or Money Advice Service to seek advice on managing debt and to look into new ways of controlling spending to meet monthly needs.

If you are looking for a debt management programme it may be worth looking at what the likes of MoneyExpert have to offer.

Image: Idea go / FreeDigitalPhotos.net

Managing Debt Effectively - Its Easier Than You Think

If you have mounting debt in the form of credit cards, personal loans, backed-up mortgage repayments, etc, then it can be a really daunting task when it comes to paying it all off!

So what can you do to help make managing your debt easier? That’s a good question and it’s not always the easiest one to answer – usually people opt to approach a debt management service, however, it’s important to consider all your options first.

What This Article Is

This article is a resource to find out how you can get your personal debt under control, offering free and impartial advice.

What This Article Is Not

This article, although will offer recommended firms to help manage debt, is not solely focused on this. It should be made very clear from the start that debt management programmes can benefit some people but is certainly not appropriate for everyone.

Don’t Ignore Your Debt

1. Try To Meet At Least The Minimum Repayments

2. Debt Counselling – some charities offer free debt counselling to people and they can give excellent advice. Try talking to the Consumer Credit Counselling Service.

3. Increase Your Income – whether that means getting an additional job, finding a new one or even asking for a pay-rise.

4. Consider switching utilities providers (gas/electricity) – shop around and see what’s out there!

5. Remortgage Your Home Or Trade It In For Something More Affordable.

6. With the ever growing price of fuel you could consider downsizing your car to a more economical model.

7. Stop gathering new debt – cut up those credit cards and stop taking out loans!

8. Cut out those vices – consider giving up cigarettes, alcohol or whatever (on average a pack of 20 cigarettes costs £5 – £6 a time – think about how much you could actually save in the longer-term!)

9. Prioritise your debt payment – get the most urgent debt paid off first.

10. If all else fails you could consider a debt consolidation plan where you consolidate all your existing loans, credit card debt, etc, into one, easy to pay, lump sum.

What Is Debt Consolidation?

Debt Management or “consolidation” is simply a method of putting all your existing debt (i.e. credit card, loan, mortgage, debt) into one lump sum.

In effect a debt management company will arrange a repayment plan where you pay everything off over a period of time. Usually you will find that the debt firm offers a good rate of interest (APR – Annual Percentage Rate) that will help keep repayment costs reasonably low – as long as you keep paying it on a regular basis.

As long as you avoid getting into more debt (cut up those credit cards or at least hide them away!) you should have your debt paid off reasonably quickly.

However, whether you take a debt management plan or not, it’s certainly worth following the ten points mentioned previously as this will help cut spending and help you live within your means.

Don’t Let Your Payday Loan Debt Grow

British consumers turning to payday loan companies for a quick finance fix are being warned to repay the money on time or risk facing high interest repayments.

According to insolvency professional trade body, R3, over 2 million people have turned to payday lenders such as Payday UK and Wonga over the past year. Many customers are drawn to the convenience of borrowing relatively small amounts (between £80 – £1,000) and, in some instances, the payday loan can be in the customer’s bank account within 24 hours.

Whilst borrowing a payday loan can prove cheaper than accessing an unauthorised bank overdraft the interest can accumulate quickly if the money isn’t repaid on time.

For example, Wonga have suggested that a standard payday loan of £100 could result in a repayment value of £187 if no repayments were made for 2 months or more. If the customer continues to default the debt is usually handed to a debt collection agency who will add on admin fees as well – driving up repayment costs further still.

One finance expert commented:

“There is a real danger that customers could fall into a spiral of debt where they have to take out a loan each month just to make ends meets. The golden rule is not to borrow money unless it is absolutely necessary.”

Help in Handling your Money

Experiencing problems managing your finances, take a look at this comprehensive list of agencies that could help you help yourself:

Debt Management
For help in consolidating debt please visit our debt management page.

Citizen’s Advice Bureau (CAB)
Debt agencies and lenders chasing you for loan and credit card repayments and feeling over-whelmed? Why not speak to the CAB, an organisation setup to give consumers free, impartial advice.

Consumer Credit Counselling Service (CCCS)
For anyone faced with growing credit card and loan debt, the CCCS offers free and confidential advice and support service, online or over the phone.

National Debtline
This service also offers free independent and confidential advice over the phone for people living all over England, Wales and Scotland. Call: 080 88 08 40 00. Alternatively, visit the National Debtline website.

Credit Action
The Credit Action organisation are a finance charity that’s dedicated to improving British people’s thinking about money. They offer a number of resources, tools and training to help educate people better about handling personal money better.

Debt Management Plans – what are they and how can they help me?

Have you run up large debts on your credit cards or borrowed where you should have saved? This is a familiar story for many people, especially at the moment in the current economic climate.

A Debt Management Plan (DMP) is a common method used in the UK for paying-off personal loans and credit card debt. Usually these types of debt have spiraled out of control or are too big to manage yourself. A DMP can be setup between the debtor and an intermediary to help re-negotiate interest rates and re-payments with the lenders in an attempt to make the debt more manageable.

The intermediary, commonly known as a Debt Advisory Service, should recognise that it is important to suggest that the individual pays only what they can realistically afford after their priority expenses, such as mortgage payments, rent, food and utilities, have been paid before any money is taken by the Creditors (the lender / credit card company).

If you are struggling with managing personal debt and it is proving more than you can handle it is certainly worth speaking to Debt Management experts to find out what can be done to control it.

Debt Management

Payday Loans Thought To Be The Main Reason Behind Low Income Debt

Payday loans and short term loans are thought to be the main reason behind low income consumers being faced with spiralling debt problems.

Debt experts are suggesting that payday loans are the primary cause for lower income consumers facing mounting debts.

Due to the inflexibility of some mainstream lenders, most notably banks as a result of the UK economic recession, people on low incomes are having to turn to payday loans to help ease “their financial burdens.”

In many cases short term loans such as payday loans and doorstep loans can help to illeviate the financial pressure on British people. However, those on low incomes are urged to be cautious when opting for a quick, short term solution to brige the gap until payday.

One debt expert commented:

“If the problem is unsecured debt that has become unmanageable then it’s important that people who are struggling to meet their repayments seek help.”

He added that people on low incomes should look into what state benefits they could be entitled to, it could mean the difference between mounting debt and the ability to face those monthly costs until payday.

Should payday loan debt get out of control consumers are urged to consider debt management plans to help ease the debt by consolidating the debt so the consumer repays the amount in easy, manageable chunks.

Free money services such as the Money Advisory Service and the Consumer Credit Counselling Service may be worth talking to if you’re after help in controlling personal debt.

Creditwindow urge any consumers to be careful when seeking credit cards, personal loans or any type of financial borrowing. Anyone looking for a loan or credit card should do some thorough research before applying for them. Creditwindow boasts a number of guides, news and features that deliver impartial advice on financial lending.

To find out more please feel free to check out any of the main categories on this site, it’s worth knowing what your options are and the differences between the loans and credit cards.

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