| My debt consolidation story | | | | enough to pay your creditors this is a warning sign |
| A Chase Saunders Case Study | | | | that things are getting out of hand. |
| I owed £60k on four loans and 11 cards, but | | | | Tip - 2: Prioritise debts |
| paid it all off and am now debt-free. Here's how you | | | | Almost everyone underestimates just how much |
| can sort your debt problems. | | | | money they owe. Your need to stop ignoring the |
| An easy to follow plan could help many relieve the | | | | problem hoping it will somehow magically disappear. |
| burden of debt and high interest payments. | | | | Get all of your statements etc together and make a |
| Britain has become a country of debt addicts, with | | | | list of all the debts. |
| many people relying on credit just to make ends | | | | Don't list the debts in order of the amount owed. |
| meet. According to the latest figures from the Bank | | | | What you need to do is list them from the highest |
| of England, we owed over £1,000 billion to | | | | interest rate to the lowest, because it's better to |
| mortgage companies. Thus, thanks to increasing | | | | pay off your most expensive debts first. Store cards |
| house prices, mortgage debt has grown by | | | | are usually the highest, because most charge rates |
| £450 billion in the past 5 years. | | | | of at least 26% APR. At this point you should |
| Over the same period of time, unsecured credit | | | | destroy your credit and store cards. With better |
| (personal loans, credit cards, store cards overdrafts | | | | budgeting you should no longer have to rely on them |
| etc) has grown from £132 billion to £192 | | | | and doing so will only increase your level of debt. |
| billion. This means that unsecured debt has increased | | | | After you have listed your income and expenditure, |
| by £1 billion a month since May 2001, and now | | | | make an honest assessment of your situation. If you |
| amounts to almost £8,000 per house! | | | | don't have enough to pay the creditors or don't |
| Personal debt is at an all-time high and it is no surprise | | | | know where to begin, get professional help from a |
| that millions of borrowers are struggling to keep up | | | | debt consolidation service, such as Chase Saunders. |
| with their monthly repayments. I know exactly how | | | | They will draw up a debt-management plan for you |
| they feel, because I was in the same situation, when | | | | and will negotiate with your creditors on your behalf. |
| I found myself owing almost £60,000, thanks to | | | | If you have a surplus of cash after all of your |
| four personal loans (including a debt consolidation loan | | | | payments then you have several options: |
| !) and eleven credit cards, most of which were | | | | • You could make the minimum monthly |
| maxed out! | | | | payments on your debts while allocating all of your |
| Here are a couple of tips to handle debts: | | | | spare cash at your most expensive debt (the highest |
| Tip 1 - Budgeting | | | | interest) until it's gone. Then tackle the next most |
| The first aspect you must tackle is your household | | | | expensive debt and so on, until all of the debts are |
| budget. Househould financial mismanagement is very | | | | paid in full. This is known as 'snowballing', because the |
| often the main cause of debt problems. | | | | rate at which you repay your debts snowballs as |
| The first thing that you should do is list all of your | | | | your debts reduce. |
| priority expenses. These are the essential bills which | | | | • If you have any savings, use as much as |
| you must pay every month. | | | | you can spare to pay off your most expensive |
| These include: | | | | debts. After all, there's no point earning after-tax |
| • Rent or mortgage(you need to keep a | | | | savings interest of 4% a year when you're paying |
| roof over your head) | | | | 30% on your store card! |
| • Council Tax(non-payment could lead to | | | | • In order reduce your interest bill and save |
| imprisonment) | | | | time, you could consolidate your existing debts with a |
| • Utilities(gas, electric, telephone and water) | | | | low-rate debt consolidation loan (or transfer to a 0% |
| • Food(you need to eat!) | | | | card - but read the terms and conditions carefully |
| • TV Licence | | | | because one late payment could void the low rate). |
| • Hire purchase(for example, car payments) | | | | However, you should only consider this if you are |
| • Child Support | | | | certain you wont be tempted to use your cards |
| • Secured Loans(your home could be at risk | | | | again! Many people who take out consolidation loans |
| for non payment) | | | | go on to build up more debts again. |
| • Travel costs | | | | If none of these options are open to you it may be |
| • Clothing | | | | worthwile considering a more formal approach such |
| • Fines, ccjs etc | | | | as an Individual Voluntary Arrangement (IVA). This is |
| Once all of these costs have been met you will be | | | | legally binding contract that can have up to 75% of |
| left with your disposable income. This is the amount | | | | your debts written off and is a viable alternative to |
| you have to pay your creditors. If you don't have | | | | bankruptcy. |