If you find yourself scratching around to make minimum payments, borrowing on one card to pay the other get some help before it gets worse.

How can I get out of debt

There lots of solutions available to deal with your debts, debt consolidation is one solution which involves working out what you have left over after the essential costs have been paid, clothes, food etc.

If you have a lump sum you may be able to get as much as 75% of your debts written off credit card debt settlement

For more information and articles about getting out of debt click the link.

The report, based on a YouGov survey, questioned over 5,000 parents of under 16 year olds and also found that one in four parents say that their income doesn’t cover the bills each month.

27% of the parents said they believe they won’t be able to pay the bills in six months time while one in ten fear that the main household earner will be made redundant in the next six months.

75% of parents have debts by way of credit cards, loans and overdrafts and the average amount owed is £8,400.

The report also showed that the costs that are causing most concern to parents are heating, paying the rent or mortgage and food.

Debt is a vicious cycle and often, we simply don’t end up with enough money at the end of the month to do much about it, but here are 7 tips that should help you to get organized long-term with your finance.

1. Analyse your monthly expenditure

Check if there are any outgoings that you pay regularly but don’t actually need, for instance are you still paying for a gym membership you never use or an insurance you’d forgotten about or don’t need?

2. Check your weekly expenditure

Cut down on what you spend daily on food and drink because it can soon mount up. For example, a smoothie can cost anything up to £3 a bottle, so instead, eat an apple and a banana and drink water. Do you really need to spend £21 a week on a drink?

3. Appraise your credit and store cards

A £1,000 balance at an APR of 14.9% will take 19 years to clear and will cost over £1,000 in interest if you pay it at the minimum 2% level. However, paying back at 3% each month brings the repayment time down to just 11 years and the interest you’ll pay to £545. That extra 1% can make a massive difference so always pay a little more than the minimum payment.

4. Reduce your energy bills

Use one of the many comparison websites to switch your energy provider to one who is charging less. While you are at it, check out if it be cheaper to have a water meter installed.

5. Get a better deal on your mortgage

It may be difficult to find a good mortgage deal these days, but they do exist. Again, price comparison sites have lots of advice for reducing your mortgage repayments and long-term interest.

If you need help budgeting or advice on debt management, speak to an independent financial adviser or contact the Consumer Credit Counselling Service (CCCS) on 0800 138 1111.

First, try not to panic, which is easier said than done with bills to pay and Christmas around the corner, but there is help out there; you just need to know where to look.

For a start, make sure that your employer pays you everything you’re owed, and if you’re in any doubt, contact the Advisory, Conciliation and Arbitration Service (Acas) who offer free, confidential and impartial advice on all employment rights issues. You can call the Acas helpline on 08457 47 47 47 from 8.00 am to 6.00 pm Monday to Friday.

Then you’ll probably need to claim benefits. Don’t put it off thinking you’ll get another job quickly because chances are, thousands of your fellow workers are thinking the same and now is not the best of times to be out of work. You can find details of benefits and how to apply for them at www.direct.gov.uk

Next, write to all your creditors explaining what’s happened and set up an arrangement – before you get into arrears if possible – to pay what you owe. The CCCS www.cccs.co.uk will help you with this or your local Citizen’s Advice will work out a repayment plan with you too. You can find your nearest office here www.citizensadvice.org.uk/index/getadvice#txt_getadvice_header-Anchor-search

Finally, even though jobs are scarce, they’re not non-existent and you can find lots of help and advice on job hunting here www.direct.gov.uk/en/Employment/Jobseekers/LookingForWork/index.htm

By December, that figure is likely to rise dramatically and is expected to exceed the previously forecast figure of 170,000.

So, what should you do if you’re experiencing difficulty in paying your mortgage?

Here are a few tips that should help you to manage your debts more effectively and keep a roof over your head.

Write a list of all your debts. You need to have a clear idea of who you owe money to and what interest you’re being charged. Then, prioritize your debts ensuring that any loans secured against your property are paid first.

1. If you’re struggling, TALK to your lender! For many, it seems easier to just ignore the letters and phone calls from lenders but unless you talk to them, they can’t help you and will assume you’re just ignoring your payments.
2. If it’s gone that far, always ensure you abide by the rules of any county court judgement and stick to any arranged payment plans. Failure to do so can result in your home being repossessed with little or no further warning.
3. Always gets free and independent advice about managing your debts because most lenders will take the advice of a debt management agency about your finances but may not if you approach them yourself. The Citizens Advice bureau and the Consumer Credit Counselling Service will negotiate with lenders on your behalf too, saving you all those distressing calls.
4. Don’t decide that simply giving your keys back to your lender will be the end of it either. In the US, the returning of keys in the post has become so commonplace it’s known as “jingle mail”! However, you may still be liable for any shortfalls if the lender doesn’t clear your debt by selling the property and they can chase home owners for this money for up to six years.

Most equity release schemes are only available to homeowners over 50 or 65, but there is a way that younger property owners can utilize equity release as well.

There are basically two types of equity release; lifetime mortgages and home reversion schemes.

Lifetime loans, also known as ‘roll-up’ mortgages, are a home loan of up to 50% of your property’s value, but with this type of loan, you pay interest on how much you borrow so the younger you are, the higher the rate of interest.

However, unlike re-mortgages, repayments on a lifetime loan can be ‘rolled up’ and are paid in full when the property is either sold or the borrower dies or goes into long-term care.

Reversion schemes are for homeowners over the age of 65 and involve selling all or part of your home to an equity release company. The homeowner then lives in the property rent-free until they die or go into long-term care. At that point, the company will sell the property and take their cut from the sale proceeds.

To be eligible for either kind of deal, your property must be in good condition but regardless of which you choose, or are eligible for, there are some things that you must bear in mind. For instance, your state benefit entitlement may be affected by any lump sum of money you have so always check with an independent advisor before committing to any sort of equity release scheme.

Also, be aware that if an equity release company buys your home and you then live in it rent free, if that company goes bankrupt, you could well be evicted and your home repossessed by whoever liquidates that company’s assets, so always be sure that you’re dealing with a stable and reputable company.

With the current crisis now formally being called a recession, many of us are going to burn our credit bridges this December by spending on credit cards when we know we’re going to struggle to pay it back.

So what can we do about it?

The single most important thing to do is to make a budget for Christmas based on what you can realistically afford, and then tailor what you buy to meet that budget. Remember that ultimately, Christmas is one day, two at most then it’s back to life as normal but back to it with sometimes huge debts that you have little hope of repaying.

Is it really worth ruining your credit record to buy a turkey big enough to feed an army? Is it worth spending £20 on a jumper for someone who will most likely never wear it?

There’s a great deal of pressure on us all to ‘provide’ at Christmas and make a huge deal of it, but we need to readjust our thinking on it. It is only one day, but it’s one day that could leave you in desperate straits for the other 364.

If you’re struggling to cope financially, now or after Christmas, here are a few organizations who can help and who provide free advice:www.cccs.co.uk

Consumer Credit Counselling Service CCCS
Helplines open 8am-8pm, Monday to Friday on 0800 1381111
Online counselling is available 24 hours

National Debtline
The helpline that provides free confidential and independent advice on how to deal with debt problems.
Tel: 0808 8084000
www.nationaldebtline.co.uk

Citizens Advice Bureau
Citizens Advice Bureaux provide free, confidential and independent advice.
www.citizensadvice.org.uk

In Derby recently, queues have been forming outside the city’s Citizens Advice and Law Centre at 7.30am, which is an hour and a half before the office opens.

In the period between July and September, the centre dealt with nearly 900 people who were looking for debt advice, ranging from help with credit cards to advice about making mortgage repayments. In the same period last year, the centre saw just over 400 people.

Now, advisers across the country fear that Christmas could plunge thousands more people into debt as they struggle to pay for presents and cope with the spiralling cost of living.

Peter Reynolds, operations director at the Derby advice centre said, “The number of people coming in with debt inquiries has soared in the last few months and we think this is because of the credit crunch and people worried about bankruptcy and being made redundant.

“But we feel we are still dealing with only the tip of the iceberg. On an average morning when I come in at 7.30am, there are usually four or five people waiting. That rises to 20 or 30 when the doors are opened at 9am. Of those, approximately 10 are debt-related.”

More than a third of debt worries relate to credit, store and charge cards. Loans, housing and bankruptcy are other major issues.

Gillian Bhalla, the debt supervisor at the Derby branch of CAB, said staff were no longer surprised by clients presenting with around £40,000 of debt, and that doesn’t include their mortgages.

Ms Bhalla said, “We expect the number of people contacting us to grow even more because of Christmas and the credit crunch. January and February will be busy.”

Tips on how to manage finances are available at www. citizensadvice.org.uk.

Charity group ‘Credit Action’ reported that the now nationalised lender was twice as likely to repossess homes than other lenders, and added that Northern Rock wasn’t being flexible enough in its approach to borrowers who have defaulted on their mortgage payments.

In excess of 19,000 homes were repossessed in the first six months of this year and around 4,000 of those were instigated by Northern Rock. Earlier this year the bank reported that it was ‘well ahead’ of its loan repayment targets and had paid back more than half of the £26 billion it owed, leaving just over £11 billion outstanding on September 30^th.

The charity’s director, Chris Tapp, said that Northern Rock’s keenness to repay the government loans meant that it was being too harsh with customers who are in difficulty.

“As soon as people fall behind, they have moved to start repossession proceedings” he said.

“We’re not talking about people who are trying to avoid paying, but people who are struggling in the short term.”

However, Northern Rock’s chairman, Ron Sandler, said, “I refute any suggestion that our position has been anything other than commercial and consistent with the way this bank has operated in the past.

“I would deny strenuously that we have been overly aggressive in terms of repossessions”

At the same time, a spokeswoman for the Council of Mortgage Lenders (CML) said that the Financial Services Authority regulations required mortgage lenders to opt for repossession “only as a last resort.”

The CML predicted that around 45,000 properties would be repossessed by the end of this year; that’s up from 26,200 in 2007, and at a level not seen since the 90s when repossessions peaked in 1991 and saw around 75,500 properties reclaimed.

If a home owner doesn’t keep up with the mortgage repayments or a secured loan, the lender can instigate legal action to repossess and sell off your home in order to recoup their money. Even if you’ve kept up to date with your mortgage payment, you could still lose your home if you default on payments for your secured loan.

Often, just two months of arrears is sufficient for your lender to take legal action but most lenders will try to help you make an arrangement you can afford and will avoid taking proceedings if possible. That said, if the lender thinks that you won’t be able to keep up with the arrangement then they will almost certainly want to repossess.

However, your lender can’t just evict you; they must follow certain procedures and obtain a court order requiring you to leave the property. In many instances, even in the last stages and right before eviction, the repossession can be stopped so if you’re faced with repossession, talk to a free adviser or agency immediately.

Don’t be scammed by one of the companies who offer to buy your home for you or offer you a loan; often, you’ll still lose your home. Talk to people who will give you genuine, unbiased and free advice. Charity group Shelter can offer help and advice as you’re your local Citizens Advice Bureau.