Free UK Debt Advice

So what should people do if they consider that their personal finances are out of control? if what your first looking for is some free debt advice, then here are a few simple steps which may help :-

• Do not bury your head in the sand (no matter how tempting it may seem!). The important thing is to recognise the problem and to deal with it head on. Also, by delaying, it will only make things worse.

• Write to creditors and explain the problems which are being faced. They are more likely to take action if they are aware that repayments are being missed, but don't know why. Effective communication with creditors is a vital ingredient in getting their help and support.

• Draw up a list of all amounts which are owed. Contact creditors first and ask for up to date balances including accruing interest. Identify the full extent of the problem so that an appropriate solution can be found.

• Draw up an income and expenditure budget so as to identify exactly how much surplus income they have available each month to pay towards their debts or arrears. Also, your client should be realistic. If they promise to pay an agreed amount, it is important to ensure that it is manageable.

• Borrowing more to solve a debt problem rarely works in isolation. You need to tackle the underlying problem rather than simply deferring it to another day. There are a number of alternative solutions available, other than borrowing more, to solve financial difficulties

• If a person in debt is thinking about releasing equity from their property to pay creditors they should take proper advice. They need to ensure that the terms of the equity release or re-mortgage are fair and reasonable. Watch out for the hidden costs! Also, they should get appropriate help in making the offer to creditors. What is important is that by giving away their main asset (i.e. the value of their property) that they have in place a proper agreement which solves their problem and doesn't weaken their ability to deal with debts which may remain.

• If a person in debt is thinking of consolidating their debts into one loan, check the terms very carefully. Although it may reduce their monthly outgoings, there can be hidden costs such as punitive interest rates, arrangement fees and lengthy repayment terms.

• For many, once the problem is recognised, they are able to resolve the difficulties themselves. However for others the issues are simply too complex or overwhelming. If they are overwhelmed then they should take early and appropriate advice from a suitably qualified person or organisation.

• People in debt should be very wary of advice from unqualified "debt advisors". If what they claim seems too good to be true, then it probably is. As you will appreciate debt problems can be solved, but there are no easy solutions!

Lastly, and most importantly, check around your local authority to get as much free debt advice as you can.   

The UK Insolvency Helpline was established in the spring of 1997 with the remit to look at meeting a long-standing need for debt and credit advice.

Its creation followed a recommendation of a national group of Insolvency Lawyers and Accountants which had been examining the effects of huge influx of unregulated debt counsellors and debt management companies that had began trading in the last decade.  The Insolvency Helpline recently launched a new webservice providing daily UK Financial news, visit the site to learn more.  

Call the UK Insolvency Helpline on 0800 074 6918. Don't forget to mention you found them on HubPages.