Debt Freedom - Face your Problems



The biggest problem with debts is you have to face up to them. Too many people with debt problems seem to adopt a form of amnesia.

An alcoholic has to face up to reality in order to recover. They then have to take stock of their problem and work on it one day at a time.

Getting out of debt is very similar. The first thing you have to do is admit to yourself that you are in debt.

Admit that the commitments you have taken on are beyond your control and you know you cannot conquer them within the next months. You also have to acknowledge that the debts won't go away. Once you take stock of your entire financial situation, set out a plan to deal with it one week at a time.

You will need to set up a budget showing your income (coming in) and your expenses (going out). You may need to get in touch with all your creditors, either by telephone or letter and explain the situation. Set out a plan your creditors are happy with, showing that they will be paid within a reasonable period.

Work out the amount you can afford to pay and this should be realistic, considering all the other living expenses you have. Look at your living costs and slash them wherever you can. This may mean going to the movies only once a month instead of once a week as before. It may mean cutting out KFC and pizza. Make this a speciality once a month rather than twice a week as before.

If you are going to do this properly, do it together with the family or your partner and focus on the one objective – to clear the debt.

If you write to your creditors make sure that you are courteous, specific and clear in your request. If you don’t know how to do this see a credit adviser at your Citizens Advice Bureau if you cannot afford the help of an accountant or financial planner. It is better to see your creditors face to face.

There’s something about a person coming humbly and acknowledging they have a problem and they are going to work on it and they intend to meet their obligations that melts a creditor’s heart.

Most creditors know the situation because they have either been in it themselves or know of other family members or friends who have been there in the past.The main purpose of all this is to get out of debt so you can turn your life around and start in a new direction.


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