When do I need debt help?

Being in debt can be a worrying and troublesome situation to be in – but not all debt is bad debt. In fact, debt can play a very important role in our lives – mortgages, credit cards and student loans, for example.

It’s only when those debts get out of control that problems can really begin. If you begin to miss payments, it won’t be long before the interest and other charges begin to build up, and in time your debts could become unmanageable.

Debt help checklist - am I in too much debt?

If you can answer yes to one or more of the following questions, then it might be time to seek debt help:

• Do your monthly outgoings often exceed your income?
• Do you have a credit card balance that isn’t going down?
• Do you find yourself having to borrow to pay off existing debts?
• Have your creditors been in touch about missed repayments?

In some cases, a simple reshuffle of your finances might be enough to get you back on track. If that doesn’t help, though, you should seek debt help as soon as possible.

Are there any debts I don’t need to worry about?

As mentioned previously, most debt is OK so long as it’s under control. However, if you’re looking to organise your finances, there are some debts that might be a lower priority, whilst others must always be given first consideration.

Your first priority should always be your secured debts (e.g. your mortgage). If you don’t keep up with payments on these, you could lose your home.

No debt solutions deal directly with secured debts, but it’s important that you are in a good position to repay them. For example, if your unsecured debts are affecting your ability to pay your mortgage, you might want to look for a debt solution that reduces your outgoings on your unsecured debts and frees up funds for mortgage payments.

Your next priority should be based on how much each debt costs, i.e. the interest rate. For example, repaying a credit card with 17% APR makes more sense than repaying an overdraft with a 0.5% rate, since you will incur less interest.

Of course, if you have debts, it is your responsibility to repay them all – and if you find yourself unable to keep up with all your commitments, it’s time to seek expert debt help.