5 Things you must never do when in debt

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Picture yourself in this position; the company you worked at for the past 10 years has suddenly found itself in trouble. Before you know it, you’re facing a redundancy package and you’re looking for a new job. All the while you’ve been unable to afford even the basic essentials. The question that always comes to mind is ‘What do I do?’ Well, in this article, we’re not only going to tell you what you should do but also what you should never do. Here are 5 things that you should never do when you’re in debt:

1. DON’T pay bills with credit cards –
If you’re already struggling to pay your bills, then using credit cards or loans to pay them will only make things worse. Remember that any balance you put on a credit card will accrue interest and cost you more, meaning that you will likely end up increasing your debt!

2. DON’T ignore your bills –
Don’t just ignore the demand letters. If you do, you will likely end up getting late payment fees/charges and a higher rate of interest being charged on your account. If you talk to your lender and inform them you are in financial hardship, they may be willing to agree to a payment plan. At the very least they will know you are in difficulty and can suggest ways to deal with it.

3. DON’T take out a payday loan –
Payday loans are notorious for being part of the cycle of debt. All of them have very high interest rates and charges that kick in as soon as you miss a payment. They might seem like a quick and easy way to pay your bills during a hard month, but if you’re in financial difficulty then you will very likely be unable to afford a payday loan!

4. DON’T rob Peter to pay Paul –
When you have serious debt and overdue payments, it often seems like a good idea to move money around from one source to pay another. This is rarely a good idea and is often a never ending cycle; if there simply isn’t enough coming in, you can’t manage to pay everyone.

5. DON’T bury your head in the sand –
Most people in debt say they wish they had done something sooner but the majority of them don’t. The problem is that if you aren’t dealing with your debt, it won’t get any smaller; it will only ever increase.

So what should you do when you get into debt? It’s very simple; get expert advice. Debt advice from Your Debt Expert is free and confidential, and easy to get, but the most important thing to do when you find yourself in the situation is speak to someone about it. An expert will give you the right information about how to go about dealing with your debts and is legally obliged to give you the correct advice.

For more Debt news and advice follow Peter Dean on Twitter – @your_debtexpert