Debt Remedy

Section 2
Your debt solution
Monthly payment arrangement
Your financial summary shows that you can afford to make your payments to your unsecured debts
(loans, credit cards etc). These add up to a total of £664 and you can afford to pay them £88 each
month.
About making a monthly payment arrangement
It may mean a few changes to your spending but the amount you have left over after paying for all your
household priorities, means that you will be able to make a monthly payment arrangement with your
creditors to pay off your debt, even if you are in arrears with them.
Your first priority is to clear any arrears and debts which are over limit, such as your overdraft or credit
cards. This will mean that you will start to reduce the interest charges and over limit fees you are paying.
Once you have done this, look into ways to clear the rest of your debt as soon as possible.
Paying the debt off early saves you money. This is because when you reduce the time to pay off your
debt, you also reduce the amount of interest and other charges which you would normally pay if you were
only making the minimum payments.
How this works
When you are able to meet your monthly payments it is very unlikely that your creditors will stop interest
or other account charges.
Try and make an acceptable arrangement with the creditors whose debts you are in arrears with by
paying them more than your normal monthly repayment. Once you have made an arrangement, stick to it
and never agree to pay more than you can afford otherwise you will get further behind with your other
debts or priorities.
Once you have done this you should consider reducing or paying all your debts off as soon as possible
by continuing to pay your creditors whatever you can afford extra each month.
Also, shop around to see if you can use different loans and credit cards which offer cheaper rates of
interest. But don't use these to borrow any more new money and always carefully check the terms of the
new agreement before signing.
Never be tempted into taking out a large consolidation loan to repay your debts and then start using the
existing limits to build up even more debt. Once you have paid your debts off, cancel the agreements
and destroy any cards.
To help you find the best way of reducing or paying your debts off, take a look at some trusted
comparison websites such as www.moneysavingexpert.com or speak to an independent financial
advisor.
If your credit rating is already affected, you may not be able to get cheaper credit so just continue
making the extra monthly payments.
Things to consider