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Sometimes debts can
build up to the point that they're overwhelming. Here's how to spot the
danger signs, so that you can get help if needed.
Missing more than one repayment
It's easy to forget to make a
payment, or have temporary cash flow problems. But miss two or more
payments in a row, and the people who lent you the money in the first
place will start getting worried.
Friendly 'loans'
You may find yourself
borrowing money from friends or family, saying it's a temporary thing. On
some level you doubt you'll ever pay it back.
Not opening bills
If you can't pay all of
that scary bill, you may be able to at least pay a little of it. Utilities
providers often have reasonable repayment plans if you're struggling. But
you have to ask for help to qualify for these schemes. Avoiding contact
with your creditors (the people you owe money to) isn't a good tactic, and
makes them suspect you won't pay, rather than can't pay. It won't go away
if you cover your eyes.
Big repayments
If you're paying out 20%, say,
of your money every month on repayments that means you're going to feel
the pinch. It's a large proportion of your income, and you will genuinely
feel like you're struggling. One slip-up, and it will be hard to find the
money for the next instalment. Make sure you're not paying too much
interest on your borrowing.
Debts staying the same
If you're paying off as much
as you can each month, but your debts are not getting any smaller, this is
a danger sign. You are in a vulnerable situation here, and can probably
only afford to pay off the interest, rather than reduce what you owe.
Things getting nasty
Whoever you owe money to will
eventually take steps to get it back. You could end up being taken to
court, and if you have a county court judgement (CCJ) against you it will
affect your credit rating for years, especially if you can't settle the
fine within 30 days.
You may also get a visit from
the bailiffs, who may take away enough of your personal possessions to
sell to cover what you owe. If you have hire-purchase agreements, the
creditors may simply take back your car or musical equipment, which could
cause serious problems if it's your livelihood. |
