When the reality bubble bursts, many people need to endure the pain that they are financially troubled. It is natural for many people trying to absolve themselves from blame. They may blame it to external things, such as flawed government rules and weak market conditions. If we find ourselves having poor financial conditions, we shouldn’t be panic. In some cases, bankruptcy is almost a certainty. However, it is actually possible for us to walk free from debt and regain our position. Here are things that we should do when we find ourselves deep in trouble:
- Seek helps: If friends and relatives are unwilling to lend us money, we could find help from Citizen’s Advice Bureau. Although they won’t give us money, we will certainly get financial assistances and we could be assigned with special financial advisor.
- Set personal budget: When we are threatened with bankruptcy, budget is essential and we need to prepare it ourselves. We may ask help to create a proper budget. In general, the budget should include income, essential expenses, emergency expenses and others. The budget should also include debt repayments with prioritization on debts with the highest interest rate or largest collaterals.
- Negotiate with creditors: If we are having financial difficulties, it is important to write to creditors to apply for a new kind of repayment. People could make genuine attempts to settle their debts and bringing the whole thing to the court may cost us too much. The local authority could also be approached so we will get lower rebate or rate. In general, we should avoid failing into arrears with rates and this could be considered as real criminal offense, making imprisonment a possibility.
- Seek help from Department of Work & Pensions: People with financial difficulties could ask the Department of Work & Pensions for help. We could be entitled to some supplements, such as family credit.
- Don’t borrow more money: We should never borrow more money to pay off our outstanding debts. This will make our problem more severe.
- Try to simplify things: We may need to give up and share anything we can do without. As an example, we could choose Pay as You Go mobile plan, than the usual mobile phone contracts. We could look for fixed rate or cheaper deals with our utilities providers. We may also choose less complicated hairstyles, so we don’t have to visit hairdressers. We should eat at home, instead of eating out or ordering foods.
- Make extra efforts to save money: There are many things we can do save more money. As an example, we should pay everything we can on standing order. This will allow us to reduce our bills and avoid penalty. We will also know how much goes our each month and how much money we will have left. By taking in lodger, it is possible for us to make extra money. However, we should check our lease to know whether it is permissible. We may need to sell of unnecessary items, such as surplus furniture, stereo equipments and others.