Christian charity Credit Action has launched a free self-help guide to personal debt management.
With total UK personal debt breaking through the £1 trillion (£1,000,000,000,000) barrier in July 2004 and likely to break through the £1.1 trillion barrier in the middle of this year, it is not unusual for people to find themselves in difficulty due to debt problems ñ often through no fault of their own.
Britain's personal debt is increasing by £1 million every four minutes and so it is not surprising that there are a number of agencies offering help with debt. But Credit Action has produced an invaluable free online debt guide which should be an aid to most people who need help with debt management.
A practical manual it offers clear, step-by-step advice on all the major difficulties including how to prepare a financial statement, how to prioritise your debts, how to negotiate with creditors, consolidate your debts and where you can go for help.
The booklet, which the charity says is essential reading for people who feel trapped by rising debt, also includes a large number of ready-made letters for copying when writing to creditors.
The first step, says the charity is to contact all creditors. Creditors after all cannot help you unless they are aware of your difficulties and circumstances. Priorities then need to be decided upon. Some debts carry more severe penalties than others and this means that they must be dealt with first. Priority treatment is not determined by the size of the debt, the period or amount of arrears or the threats being made however. Priorities should be set, says the charity, by the actual legal remedy the creditor has against you for recovery, which in some case may be losing your home or even imprisonment.
The charity then urges preparation of a financial statement include all income received from whatever source and all money going out and to where. The next two steps are to maximise income and minimise expenditure. Additional income can often be obtained through claiming benefits, part-time work or a lodger. Fuel bills and other household expenditure can also often be cut. Any money left over should go toward clearing debts through regular payments wherever possible.
"Not many consumers feel confident in managing their money, and yet there are few parts of our lives that carry the same degree of risk if it all goes wrong. These booklets by Credit Action are simply invaluable" said Ed Mayo, the
Chief Executive of the National Consumer Council.
If you need help on debt matters the Consumer Credit Counselling Service (CCCS) free helpline ñ 0800 138 1111 ñ is available Mondays to Fridays 8am to 8pm.