What to do if you are struggling with debt?

Debt can be an incredibly difficult thing to manage and overcome. It’s often hard to escape and leaks into other aspects of your personal and professional lives, especially if the boundary between the two is blurred or non-existent.

However, there is always a means to get help with debt. Often, having the right advice and guidance can be enough to climb your way out of debt, even if only slowly.

Dealing with debt problems

Dealing with debt can be a really difficult time for many reasons. Not only does it threaten your financial wellbeing, but the mounting pressure can also cause you to make rash decisions and big risks in an effort to find ways out. When these don’t pay off, you may only dig yourself deeper into debt.

For these reasons and more, debt should be tackled with clear advice, sound knowledge, and patience. Solutions often don’t come quickly, but it’s important to make progress without falling prey to foolish gambles and avoidable mistakes.

Can I get help with paying off debt?

Help with paying off debt doesn’t need to come in the form of extra money. Quite often, the answer can lie in a structure that makes the debt itself more manageable than a demand for the full amount.

For instance, an Individual Voluntary Arrangement (IVA) can be implemented with the help of a licensed insolvency practitioner to break up your debt into parts that are easier to pay. Such arrangements can also provide some peace of mind to the debtor that their money is coming back to them, albeit over time.

For businesses, a similar Company Voluntary Arrangement (CVA) or, if needed, a period of administration may be enough to rescue a business from its debts and from legal action on the part of those waiting for their money.

Is there a government scheme to help with debt?

There are currently no help schemes offered directly by the UK government for managing debt, but formal solutions to debt such as the arrangements mentioned above were introduced by the government. IVAs, for instance, were introduced with The Insolvency Act 1986.

In many cases, you will want to seek the help of independent licensed insolvency practitioners to help with debt directly.

How do I get out of debt if I have no money?

Bear in mind that a lack of cash doesn’t necessarily mean a lack of money. Businesses that enter administration may have enough money tied into assets that can be sold to pay off debt. Individuals, likewise, may be able to relinquish personal property to meet their debts. Whilst often unfavourable, these options can allow you to continue life (and trading) as normal and get help with debt.

Alternatively, in more extreme cases, bankruptcy or liquidation may be needed to glean some recovery from your debt troubles. This gives you some legal space from creditors, too, but they are not steps to be taken lightly.

How do I ask for debt forgiveness?

You can write to your creditors asking them to forgive a debt that you are unable to pay. You might want them to write off the debt entirely, or settle for a smaller repayment amount and forgive the remaining part.

While this shows an active stance from the debtor in searching for a solution, there is no obligation on the part of the creditor to forgive your debt or even to acknowledge your letter.

However, there is nothing to lose in trying, and for some in different circumstances—such as those who were coerced into taking out a loan they didn’t want to—it might at least open the door to a resolution.

For help drafting a letter, try the sample letters pages of the Citizens Advice website.

How do I get all my debt into one payment?

You may be able to combine debts with various lenders into a debt consolidation loan, but whether or not you can lump your debts together depends on the various creditors you owe.

If you owe money to a variety of lenders, businesses, and individuals, there’s no single pot you can put all your debt into. These creditors will need to be handled individually. Fortunately, an insolvency practitioner can help you with this and keep things as simple as possible.

How to get help with debt

If you’re struggling with debt, don’t keep struggling. Irwin Insolvency have over 25 years of experience in finding cost-effective solutions to debt management – from debt management plans to tailored debt advice. If you owe money you can’t pay, talk to us. There may just be a solution within reach.

Contact us today.