Debt Management
Below is a MRR and PLR article in category Finance -> subcategory Wealth Building.
Debt Management
Overview
Recent statistics reveal that 8.2 million British adults are grappling with serious debt, according to Callcredit. Alarmingly, their research shows that 60% of UK consumers are uncertain about the total amount they owe to financial institutions.
Debt Challenges Among Seniors
A significant portion of those facing debt issues are over the age of 60. This demographic is experiencing faster debt growth than any other age group, as reported by the Consumer Credit Counseling Services. They anticipate that by the end of 2007, they will assist more individuals over 60 than those under 25.
Denial and Awareness
Research by unbiased.co.uk supports the notion that many UK consumers remain in denial about their actual debt levels. In fact, 6% of British consumers?"around 2 million people?"cannot precisely determine their total debt. Here are some steps to regain control:
Taking Control of Your Debt
1. Create a Debt List: Begin by listing all the organizations and individuals you owe, including secured loans, unsecured loans, credit cards, and your mortgage.
2. Categorize Your Debts:
- Priority Debts: These include mortgages, secured loans, utility bills, council tax arrears, court fines, and taxes like income tax or VAT.
- Non-Priority Debts: These consist of credit cards, overdrafts, personal loans, and hire purchase agreements.
3. Budgeting:
- Income: Include wages, benefits, and any other income.
- Expenses: Account for all outgoing costs, including basic living expenses and priority debts like mortgage payments.
4. Payment Offers: After calculating your budget, determine what funds are available for non-priority debts. Approach creditors with payment offers for these.
Seeking Professional Help
If managing debt independently feels overwhelming, consider hiring a debt management company. They offer the convenience of a single monthly payment and handle creditor communications for you. However, many charge upfront and monthly fees, which may reduce available funds.
Conclusion
Debt remains a prevalent issue in the UK. Whether you choose to manage debt on your own or with professional help, seeking advice from experienced advisors or the Citizens Advice Bureau is highly recommended.
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