Do Your Own Debt Consolidaton And Save! Know Exactly When You Will Be Out Of Debt, And Sooner Than You Think. No: New Loans, Credit Checks, Monthly Fees, Discussing Your Situation With...
Put away all of your credit cards. Try to pay for purchases with cash or checks until your credit card balances are paid in full.
Do not apply for credit cards that you don't need.
Determine the total amount you owe creditors.
Pay credit cards with the highest interest rates first.
Pay your lowest balances first to completely remove some of your debts.
Investigate any opportunities to transfer your existing balances to a card with a lower interest rate.
Reduce your spending and set a realistic budget.
Set goals. Once you've achieved them, reward yourself with small indulgences.
Review credit card statements and credit reports for errors.
Keep records of income and expenses.
Only charge what absolutely must be charged and not things you could pay for now.
Use your debt card instead of a credit card.
Request copies of your credit rating and credit score from Equifax, Experian, and TransUnion. You need all three, because each company may have different information. If the information on either credit history is wrong, correct it immediately.
Pay your bills on time. Even if a company allows a grace period, don't use it.
Own between two and four credit cards. Fewer cards shorten your credit history; more cards indicate that you are financially stretched.
Keep your debt-to-income ratio under 20 percent.
Pay more than the minimum required on your credit card.
Top 10 Tips
Communication
Communication is the key to successful negotiations with creditors. Do not ignore their letters. Answer them promptly by letter or by telephone. If you promise to contact someone by a certain date, make sure you keep your promise and contact them even if only to tell them when you are going to make a payment to them or advise why there is a delay.
Mind Your Manners
It never pays to get angry with anyone, even when you feel justified in doing so. Always be polite and courteous even in the face of being treated rudely. It takes the wind out of their sails. If someone is acting negatively with you and you react negatively, it always makes the situation worse. As a debtor your objective is to persuade someone to be sympathetic to your circumstances.
Don't Take Any Nonsense
Don't take any nonsense from anyone. 100 years ago we used to have debtors prisons in the UK. If this was the case now we would not have enough prisons to house even a small proportion of debtors. The worst that can happen is that a creditor will obtain a judgment against you and take money from you on an involuntary basis, which you can avoid through several ways explained in this website. If you are being harassed by a creditor or a company employed by a creditor take the name of the individual and report them.
Get It In Writing
Get it in writing. Always create a paper trail. This starts with your records such as invoices, credit card statements etc. Every telephone call, letter written/received and offers made. Always make a note of the date and time and to whom you have spoken and if necessary confirm all conversations or offers in writing.
Don't Bluff
If you make an offer, make sure that you can do what you have promised. Don't tell creditors what you think they want to hear. Tell them what you really can do making sure you follow through.
Don't Threaten Creditors With Bankruptcy
Most creditors and their agents hear these types of threats every day. It is a form of stonewalling that hinders negotiations. Creditors are likely to become more aggressive and their standard reply is "go ahead and file". There is a way to do this indirectly in the context of portraying adverse financial circumstances, with an inference that bankruptcy is a possible alternative in the event that the creditor does not accept your offer.
Make your offer as brief and precise as possible
Explain the reasons for your current financial difficulties and then come to the point and make the offer. Make the terms of the offer precise. Do not leave things open ended such as "things should pick up during Christmas and I will increase my payments if I can".
If You Get into Trouble
If you get into trouble after you have negotiated an offer and you can't adhere to the arrangement, contact the creditor in advance. Attempt to send a portion of the funds you promised with a proposal to make up the balance, or renegotiate the entire proposal. Do not wait to contact the creditor until after you have missed a deadline for payment.
Protect Yourself
If you receive Court or official papers, protect yourself. Make sure you know how much time you have until a legal response is required to be filed with the Court. This is usually set out on the Court or official papers. Consult with either a Citizens Advice Bureau or similar organisation or insolvency practitioner/solicitor regarding your rights or the means to resolve the claim without going to Court. If you contact the creditors or their agent and start negotiating the claim, make sure the response deadline is postponed to a date that you can keep to. This postponement must then be confirmed in writing.
Be Realistic
Always be realistic with your offer. Only offer what you can actually afford. Ensure you complete your statement of means as accurately as possible, not forgetting expenses such as school expenses, child minding, cigarettes, TV licence etc. Do not however insult your creditor by over estimating your expenses, such as entertainment, dining out etc. The majority of creditors are fair and they will expect realistic payments within your budget.
Golden rules of debt
Don't bury your head in the sand.
The problem will not go away, the longer you leave it the worse it gets.
Do not be tempted by consolidating your loans.
Take advice, especially on secured second loans. You could end up losing your home.
Make sure you pay your priority debts
e.g. mortgage, council tax, fines etc.
Contact your creditors immediately,
either phone or write to them. You will be amazed as to how helpful they can be.
Check your entitlements
i.e. benefits, insurance claims etc.
Use our sample letters to write to your creditors.
Use the sample financial statement of affairs to work out your income/expenditure and an offer of repayment.
Keep a paper trail.
Note every telephone conversation, letter, date, time and name of person to whom you spoke.
Do not accept rejection.
Creditors are like any business, they are only as good as the staff. If you find a member of staff unhelpful, ring back and speak to someone else, you will be amazed at the difference.
Do not ignore Court papers.
Courts actually work to your advantage as much as the creditor, the majority of Court Judgements are issued by default because the debtor doesn't respond!
Always attend Court hearings.
There is no jury and you will not be sent to jail, ( unless you are a criminal of course).
Seek professional help.
Contact myIVA-Adviser.com 0800 088 7505
Disclose all information
Always declare all debts and income/expenditure. Do not underestimate or exaggerate your expenses.
Keep in regular contact with your creditor.
If you promise to return a call, make sure you contact them before they have to contact you again.
DO NOT BURY YOUR HEAD
We personally estimate that 50% of red letters are never opened. You will not solve your problems until you have faced them.
DO NOT PANIC
You have obviously got debt problems to be reading this page
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