This is a question that has a couple of probable answers. First, it all depends on your specific situation, how much debt you have, and what kind of credit you have.
Our answer may seem a bit broad, but we will try to make it applicable to the majority of situations rather than a select few. Hopefully, you will find some wisdom in our answer.
Most people that are in debt trouble are faced with numerous payments each month. They find themselves putting hundreds of pounds into debt with little if any of the principle actually coming off the debt load.
This is not only frustrating, it often leads to a “who cares” attitude and they then begin missing payments.
The source of this frustration is generally the high interest rates and fees for late payments. When the debt is high enough, the minimum payment due is sometimes less than the actual monthly interest.
Here you are paying money, not charging anything, yet you still accumulate more and more debt. When this occurs, there are several options to pursue.
The first step should be to talk to all of your creditors to find out if they will lower the interest rate so you can make your payments more effective.
If they refuse, it is time to search for a low interest debt consolidation loan. However, this is only effective if you are able to significantly reduce your interest rate and cover all of your debt.
If that is not possible, there is still some hope.
At this point, we would recommend contacting the local CAB to see if they can help. The counselors are very skilled in helping individuals specifically in this type of situation.
As a last resort, a DRO, or debt relief order, may have to be filed. At the very least, this will give you a one-year span in which to get your finances together and resume payments or have the debt discharged as a bankruptcy.