The Hour

With the economic climate the way it is, many of us are starting to feel the pinch – so what could be better than some debt busting tips from money Lesley Campbell?

Lesley’s tips often address the psychological rather than financial consequences of debt and she feels this is important in order to tackle the issue.

“Debt is debilitating and banks know this; it's one of the ways they make money. People tend to avoid debt issues because it makes them distressed and its existence makes them feel vulnerable. All the while, interest is building and the debt is growing. So address the emotions first.”

If you need some advice, check out Lesley’s top five tips for sorting out debt problems:

1. Get help.  Go to Citizens Advice or one of the free independent debt counsellors. Don’t go to any company that offers to settle your debts for a fee. The idea of handing over the issue to someone else is very appealing, but it's likely cost you even more and may achieve nothing.
 
2. Stop the clock. Lenders want to get rid of your debt as much as they do. They’re worried that you’re going to default – be unable to repay the loan. That gives you some bargaining power. Go to them and stop the interest continuing to mount up. They’re also more likely to do a deal so if you owe £750, offer them £500. Again, if you can’t face talking to one of these aggressive call debt collectors, get someone else to do it.
 
3. Get consensus and stop handling this on your own. Sit the family down and tell everyone that you’re all going to have to pull together - you have a plan, and a list of expenses that are going to be cut. Even if some of the family will resent this and fail to participate, they shouldn’t be kept in the dark and they ought not to be indulged when other members are suffering.
 
4. Switch cards, mortgages, utility providers. Only about a quarter of people who could save money this way do.
 
5. Assume the worst case scenario. Face up to it, it’s frightening but like any other ordeal, the more you face it, the less alarming it becomes.  Again, warn the entire family. If you think you’re going to lose your house, take a look at properties available for rent. Walk the family though the entire process and look past the crisis.

With the economic climate the way it is, many of us are starting to feel the pinch – so what could be better than some debt busting tips from money Lesley Campbell?

Lesley’s tips often address the psychological rather than financial consequences of debt and she feels this is important in order to tackle the issue.

“Debt is debilitating and banks know this; it's one of the ways they make money. People tend to avoid debt issues because it makes them distressed and its existence makes them feel vulnerable. All the while, interest is building and the debt is growing. So address the emotions first.”

If you need some advice, check out Lesley’s top five tips for sorting out debt problems:

1. Get help.  Go to Citizens Advice or one of the free independent debt counsellors. Don’t go to any company that offers to settle your debts for a fee. The idea of handing over the issue to someone else is very appealing, but it's likely cost you even more and may achieve nothing.
 
2. Stop the clock. Lenders want to get rid of your debt as much as they do. They’re worried that you’re going to default – be unable to repay the loan. That gives you some bargaining power. Go to them and stop the interest continuing to mount up. They’re also more likely to do a deal so if you owe £750, offer them £500. Again, if you can’t face talking to one of these aggressive call debt collectors, get someone else to do it.
 
3. Get consensus and stop handling this on your own. Sit the family down and tell everyone that you’re all going to have to pull together - you have a plan, and a list of expenses that are going to be cut. Even if some of the family will resent this and fail to participate, they shouldn’t be kept in the dark and they ought not to be indulged when other members are suffering.
 
4. Switch cards, mortgages, utility providers. Only about a quarter of people who could save money this way do.
 
5. Assume the worst case scenario. Face up to it, it’s frightening but like any other ordeal, the more you face it, the less alarming it becomes.  Again, warn the entire family. If you think you’re going to lose your house, take a look at properties available for rent. Walk the family though the entire process and look past the crisis.