No one is exempt from bills (it’s just a modern human thing, bills) but there are times when you might find that you’re in over your head with the money you owe. And have no idea how you’ll ever pay it. By far the worst thing you can do is pretend it’s not there, as it won’t go away. The solutions are below:
Cutting your costs
But if you know how you spend your money normally you can then see where you could cut it. You could shop around to bring bills down or just get started selling things you don’t need such as a second car.
Informal arrangements
This is an informal arrangement, whereby your creditors agree to take a certain amount of money from you, at set intervals, over a set period.
Debt management companies
If you’re in debt, debt management companies (DMCs) are in your corner. Most of the time they only do non-priority debts. In other words, they bargain with your creditors and try to make the overall payments to your creditors the least. But then you pay the DMC, and the DMC pays the creditors. But most DMCs charge a fee, so you won’t have much of your income left to pay off your debts. Debt management plans are also free through organisations such as the National Debtline and StepChange Debt Charity.
Consumer-led, individual voluntary arrangements
Voluntary arrangements are a formal agreement to pay all or some of your debts to your creditors over some time. You need to be set up by an authorised debt specialist, which comes at a cost on top of that too. You can involve your personnel in the five and six points about cutting spending and raising revenue. They could have ideas for a good cause, so. It is also an opportunity to build a team. As you think about your emotional health, consider paying down debt. When you have debt, it’s time to think clearly. It can ruin your emotions, so you shouldn’t take it for granted. So practice what you have learned from the other businesses about keeping your mojo intact and don’t be afraid to solicit trusted opinions if you need it. Remember too, that you have to keep an eye on your staff’s mental health and well-being as well.
Administration orders
If you have debts of £5,000 or less you can afford to regularly repay your debts to your creditors. You may be able to get help with your debts using an Administration Order.
An administration order is something you have to apply for from your local county court pay costs and abide by conditions. Make sure lenders are being fair to you. Your bank or building society should treat you fairly. An independent body with an independent board of non-executive directors, the Independent Complaints Mechanism (though funded by registered financial firms), is independent. It has voluntary Standards of Lending Practice, for business customers.
If your debt has already been to a collection agency, what can they do for you
You may not immediately see that you owe the debt or that you don’t have the money, but at least try talking to the collector. That’s another way to make sure you learn more about the debt and if it is yours. They are trying to scam your money out of you. You also must provide a collector with ‘validation information’ that the debt is yours. They might even do so while the collector is on the phone with you for the first time, or in writing within five days after that.
The free and easy-to-use service settles disputes between small businesses and financial services providers.
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