The following is a guest post
A credit card can be a very useful facility for people who are in complete control of their finances. It can help someone to build a positive credit record, and it can provide protection from fraud, theft and unscrupulous vendors. It can also provide a handy contingency fund for when the unexpected happens. However, far too many people use a credit card to pay off debts or for extravagant spending habits. Where people can pay the balance off in full within thirty days there is no problem, as interest will usually only be applied after that time. Sadly, many people insist on paying only the minimum payment – something that can quickly lead to an uncontrollable cycle of debt.
Minimum payments only address the monthly interest charges that are being applied to your debt; this leaves you living your life under a cloud of financial constraint, and your ability to buy a home or a new car could be severely affected. The problems don’t stop there for many people, however. Faced with crippling monthly minimum payments, many people decide to apply for new credit cards in order to cover debt repayments elsewhere, and so the cycle of debt begins in earnest.
Professional Help with Debt Puts You Back in Control
Thankfully, consumers in the UK can seek help from debt help specialists. Experienced in dealing with a wide range of credit providers, a debt help advisor will start by delving into your finances. A budget calculator will often be used to do this, so a clear and accurate disposable income can be ascertained. This figure can then be used as a starting point for negotiations with creditors.
The priority for most debt help specialists is to freeze interest charges. They know exactly how to deal with financial institutions to achieve this goal, and they are usually more likely to negotiate a satisfactory outcome than consumers themselves. Knowledge of the law surrounding credit and an understanding of the market as a whole gives debt specialists the best chance possible of restructuring debt repayment schedules.
Once the interest has been frozen, the consumer’s disposable income can then be used as a way of demonstrating to creditors exactly what is affordable. In many cases, an agreement on repayments can be made that is acceptable to all parties. Where an informal agreement is not possible, a debt specialist may advise on other courses of action.
What Are Your Options?
An Individual Involuntary Agreement (IVA) may be possible if debts exceed £15,000, but this is usually only possible when two or more different creditors are involved. A monthly repayment figure is set that is affordable; after the agreement ends, any unpaid debt is simply written off.
Unfortunately, people are forced to adapt to changing incomes due to illness, unemployment or retirement, and there may be no other option than to take the bankruptcy route. A reputable debt specialist will always have the best interests of the client at heart, and this course of action will always be the last resort – it can have long-term effects on a person’s ability to obtain credit, buy a home or even take up certain job opportunities.
Whatever course of action is best for your circumstances, the first step in breaking the cycle of credit card debt is simply asking for help. A trained, experienced debt specialist will be able to put you on course for a far brighter financial future.
1st Point Debt Solutions offers debt management solutions to help you resolve your debt problems. If you require help on your payday loan debt, please visit – http://www.1stpointdebtsolutions.co.uk