First, make a list of your creditors (NOTE: you should only attempt to re-negotiate
payments on your UNSECURED debts if you wish to avoid the risk
that an item upon which a debt is secured could be re-possessed)
Add to this list the outstanding balance owed to each creditor.
It is essential that you are accurate with this balance. You
should find the balance on the most recent statement from each
creditor on your list. If you cannot find a balance figure, call
the creditor or write and ask for a current outstanding balance.
Only when you have an accurate outstanding balance for each
creditor on your list can you proceed to the next step.
From your financial statement (prepared in the last of this
series), subtract the total of your outgoings from the total of
your income. The resulting figure is your disposable income.
You need to divide the disposable income figure amongst your
list of creditors in proportion to the outstanding balance owed
to each. This is why you need an accurate balance before you
start. Otherwise, your creditors will not accept your proposal.
When you have done this, write a letter to each creditor quoting
your name, address and account number, offering to pay the
amount you have calculated for that creditor.
You will need to include a copy of your financial statement with
each letter, and you will need a valid explanation for your
hardship, which now prevents you from paying the full amount
agreed initially.
It is not difficult to see that the success of your proposal
will depend on how well you have put together your financial
statement. The amounts you have claimed for each item of
expenditure will need to be acceptable to your creditors.
Unfortunately, there is no hard and fast rule I can give you for
this. it is entirely dependent on the combination of your
circumstances, which is unique for everybody.
If one or more of your creditors rejects your proposal, they
will probably indicate why. It will then be necessary to re-jig
your financial statement and re-send it to all creditors with a
new letter. Certainly this can be time-consuming and tedious but
there is no easy answer to this.
Rob Hawkins is the owner of
Debt Consolidation UK. His company Chiltern Debt Management UK has helped more than 50,000 people to get rid of debt problems, and won the coveted ‘Debt Counsellor of the Year 2004′ award.
You’re not alone. Many people face a financial crisis some time in their lives. Whether the crisis is caused by personal or family illness, the loss of a job, or overspending, it can seem overwhelming.
But often, it can be overcome. Your financial situation doesn’t have to go from bad to worse.
Have you considered preparing a budget?
The first step toward taking control of your financial situation, is to do a realistic assessment of how much money you earn and how much money you spend. Start by listing your income from all sources. Then, list your “fixed” expenses those that are the same each month like mortgage payments or rent, car payments, and insurance premiums. Next, list the expenses that vary like entertainment, recreation, and clothing. Writing down all your expenses, even those that seem insignificant, is a helpful way to track your spending patterns, identify necessary expenses, and prioritize the rest. The goal is to make sure you can make ends meet on the basics: housing, food, health care, insurance, and education. Your public library and bookstores have information about budgeting and money management techniques. In addition, computer software programs can be useful tools for developing and maintaining a budget, balancing your cheque book, and creating plans to save money and pay down your debt.
If your objective is to reduce interest rates and lower your monthly payments, avoid bankruptcy, consolidate your bills and have one monthly payment, or simply get out of debt the fastest way possible, then a debt consolidation loan could provide the answer.
Are you paying out too much every month for your credit cards, store cards and loans? Then why not replace them all with one, lower, convenient repayment through a consolidation loan?
Consolidation loans can give you a fresh start, allowing you to consolidate all of your loans into one - giving you one easy to manage payment, and in most cases, at a lower rate of interest.
Secured on your UK home, low cost, low rate, cheap, low interest debt consolidation loans can sweep away the pile of repayments to your credit and store cards, HP, loans and replace them with one, low cost, monthly payment - one calculated to be well within your means.
With a Debt Consolidation Loan you can borrow from £5,000 to £75,000 and up to 125% of your property value in some cases.
A UK Debt Consolidation Loan is a low cost loan secured on your UK home. It frees up the spare capital (or equity) in your home to repay your store card and other debts.
It can reduce BOTH your interest costs AND your monthly repayments, putting you back in control of your life.
Debt Consolidation Loan rates are variable, depending on status
Monthly repayments will depend on the amount borrowed and term.
You may freely reprint this article provided the author’s biography remains intact:
John Mussi is the founder of Direct Online Loans who help UK homeowners find the best available loans via the http://www.directonlineloans.co.uk website.