Eight common mistakes to make when you’re in debt
By Mr Bankruptcy
12th July 2019
When you are in serious debt it’s important to remember that with the right approach, there is always a way to address the situation.
To help you make a start, it’s also important to know what to avoid doing in order to prevent your debt situation from getting worse. Here are some of the more common mistakes I see people make:
1. Continuing to spend as you were: Your spending habits should be one of the first things you consider. Look at cutting back and removing expenditure altogether in order to reduce the rate at which your debt increases and to help generate money to start paying it off.
2. Trying to clear debt without a plan: Take the time to understand the debts you have, the interest rates or fees associated with them, terms of repayment, etc. With a comprehensive list of debts, it’s easier to understand priorities and devise a plan of action, keeping you focused and motivated to get out of the problem.
3. Paying off all debts equally: Take into account varying interest rates and address priority debts first. Some debts also have more serious consequences than others. Understanding the debts and the terms associated with them will give you a sense of which need addressing first.
4. Continuing to use your credit cards: Stop using your credit cards with high interest rates. If you open a new credit card to transfer a balance because of a lower or zero interest rate, be careful not to use this card for spending and increase your debt.
5. Not saving: Not having money put aside for emergency expenditures can cause more debt as you have to use credit to make an unforeseen payment. Try to keep saving some money for a rainy day.
6. Signing up to a debt solution without understanding the implications: There may be several options to clear debt but ensure you understand them and any consequences associated with each. All debt management solutions have their pros and cons, depending on circumstances and you should be aware of any long-term implications.
7. Ignoring demands: While you ignore your debts they are growing and you will lose visibility of what’s happening. Open your bills, statements and letters, read them and feed this information into your plan for managing debt.
8. Not seeking help: Getting expert advice will help you understand your options and help define the path ahead, ensuring it is tailored to your circumstances. Talking to close family and friends will also help provide emotional support when times are particularly stressful, especially if they’ve been through a similar situation themselves.
Debts can seem overwhelming but with the right advice, planning and support you may be surprised how effectively you can manage them and take back control.
James Rosa Associates
James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors facing unmanageable debt or involved in civil or commercial disputes.
Our services include:
● Insolvency support
● Negotiated settlements
● Personal assisted bankruptcy
● Mediation
We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.
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If you need to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.
Please be advised that all views expressed in these posts are those of the author and not of James Rosa Associates ltd.