Published in Debt Advice Features on Friday, March 30 2007

There are many reasons why people get in to debt, far too many to go into as every one has a unique set of circumstances, however you may find yourselves in situation similar to one of the ones below, you may even recognise that you are heading towards one of them and may be able to do something to stop it now.

Most of the time it really isn’t your fault that your debts have got out of control it can be due completely to a change in circumstances. For example when you first took out the debt you could completely afford it and manage your repayments, but now something has changed and there is no way you can pay even the minimum payments. This could be down to a marriage break up, or redundancy or loss of work, maybe down to illness. There is no real way to safe guard against this as who knows what is round the corner. I personally do not think much to the insurance plans that get sold along side credit as they are very expensive, and under the terms of your credit agreement if you can no longer manage your payments you are entitled to justify and make a payment that you can afford. Obviously try an avoid credit in the first place, but if you are reading this it is likely you are already past this point!  The best thing to do if your circumstances have changed is to either discuss it with your creditors, or if this gets you no where, as usually it does not, speak to credit counsellors, and they will be able to advise you of your options. Make sure you approach counsellors who will look at a range of solutions as you do not want to be shoe horned into a solution and make sue the advice if free.

Another situation where we think of people in debt are the students amongst us. During your time as a student you are usually running up a student loan, but usually at least this is protected and normally you only begin paying it back after you finish studying and if you are earning over a certain amount. However credit is literally thrown at students. Remember enrolling ֖ the numerous stands from various credit cards companies offering you incentives from popcorn machines to rail passes for taking out credit. With most student accounts it is almost compulsory to take out a large overdraft. I hardly know a single student with out an overdraft! It is hard whilst you are studying as obviously you only have a loan usually to survive on and you don’t have the time to work lots of hours in a job, and of course there is living the the student lifestyle that doesn’t help!! Suggestions to help you here are to budget budget budget!! Stop using credit to tide you over, stop straight away. If you don’t have enough money firstly look at trying to earn some, secondly most universities have a fund to help out if you are financial difficulties so visit your student resources centre to find out more. Can you work over the summer/Christmas? Try not to take up loads of offers and see if there are any debt solutions to help you with your current repayments to try and ease your finances and stop you getting into more debt.

Do you have an addictive personality? We often associate debt with gambling or alcohol addiction, but it goes hand in hand with pretty much any addiction. First of all you need to assess why you are addicted to what ever it is you are addicted to, for example many gamblers believe that gambling will solve their debt problems when they eventually get that windfall.... compulsive spenders feel better when they spend, so you feel down about the debts, you go spend more, hence you are stuck in a vicious circle, alcoholics may drink to stop worrying about the debt.... Once you work out why you do what you do you then need to stop it. You may be able to do this on your own, with the help of friends and family or you may need to seek outside or professional help. Which ever category you fall into you have to tackle it as things are only going to get worse not better. You can also get help to manage with your current financial affairs as this may ease your worries and make beating your addiction even easier. What ever the reason you have to remember it is only money and yes we do need it but it is not the end of the world if you have made a few mistakes and even if you have to face bankruptcy, even that can be seen as a fresh start, a new beginning with your finances, so every debt problem can be resolved in some way.