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Things to Consider Before Your Debt Spirals Out of Control

01/04/2015 20:18 BST | Updated 31/05/2015 10:59 BST

Awareness of the burden of debt many people are struggling under is regularly discussed by national surveys, the media and government advisory bodies. For many students, young people and families increasing debt is a cause for serious concern. In many homes the fear of being overwhelmed by their debt is never very far away, in many cases only the most recent pay cheque between them and being homeless. A change in interest rates, divorce, loss of overtime or bonus payments can literally throw a tightly managed household into tragedy.

Let's consider some things that may be able to help before your debt spirals out of control:

- Concern at what friends, family, colleagues may say or think can often cause a knee jerk reaction against a visible reduction in spending power. Fear of looking a failure, being diminished in other peoples' eyes can cause otherwise sensible, rational people to hide the truth from others, sometimes even from their partners. But appreciating that many people are equally constrained by their finances, that their partner will understand and want to help avoid any financial problems escalating can enable the situation to be dealt with sooner rather than later, before debt starts to mount up excessively. Keeping up appearances can result in rash over-spending and further exacerbation of the problem.

- Do you really know where your income goes? Start by detailing the household expenses. Many people automatically pay standing orders without thinking too much about them. Appliance insurances, unused memberships may be able to be rationalised and let go. Investigate changing onto cheaper tariffs, using more efficient providers, travelling more efficiently, shopping at less expensive stores.

- There may be unconsidered ways of earning money. Many homes have wardrobes full of quality, hardly worn clothes that have simply been outgrown or become outdated or there may be stacks of unused gadgets and appliances stored away in the spare room. These items could be sold online or at a car boot sale. What about a skill or talent such as cake making, gardening, decorating that others would be happy to pay for, that could be done part-time, as and when is convenient? Time is something that many people are short of. Why not offer to help them with their time constraints and discover a new source of income; things like shopping, collecting children, running errands could help a time-strapped family and earn you a little extra money.

- Credit cards and pay-day loans are often used excessively when income is tight. They're often viewed as an emergency fund, money in reserve, as spare available cash. It's only when statements start to arrive that there comes the realisation that the outstanding balance plus interest is unable to be reduced. When only minimum payments are made it's virtually impossible to pay off more than the monthly interest; like treading water, it becomes harder to stay afloat. It's important to speak to card provider(s) and other creditors like mortgage providers and utilities as soon as they start to prove hard/impossible to pay, the earlier the better.

The sole aim of creditors is to get their money back in the most efficient way. By speaking to them as soon as possible enables a realistic plan of repayment to be implemented. It's in no ones interests to institute court proceedings so pick up the phone, explain the situation and make an offer to pay what you can afford. Mortgage providers are often prepared to go onto 'interest only' arrangements where they receive the borrowed capital when the property is eventually sold.

- Share with friends that you're cutting back a little on your spending. Real friends will be happy to see you for a lasagna and a bottle of wine at home and not be disgruntled at missing out on that expensive restaurant meal. They'll be happy to catch up over a cup of coffee instead of a cafe lunch. Many people will appreciate the opportunity to scale down their own dining out budget. Girls nights can be dedicated to fun pampering sessions at home instead of booking treatments at beauty salons.

- Children are often a major part of household expenses and children's education is often the reason why families choose to live where they do; the catchment area for good schools is often seriously reflected in local house prices. Sometimes though there may need to have a discussion about the impact such a heavy financial commitment is having on the household budget. School fees, uniforms, trips, expenses all add together to erode disposable income and may leave the family unable to survive financially. Investigate the possibility of other good schools nearby; do you know anyone who goes there, how easy might it be to change, how might you approach that discussion with the children?

Debt can catch us unawares. Something that was just about manageable can gradually spiral and become out-of-control. There are several advisory bodies in the UK willing to help. The Citizens Advice Bureau and the National Debt Line are two bodies available to discuss individual cases, but all advice starts with protecting your home, reducing overheads, being honest and facing the fact that this problem needs to be dealt with as soon as possible, before it gets any bigger.