Before entering into one of the solutions, have a think about other ways you could deal with your debts such as:
Temporary Repayment Plan
This is when you want to repay your debts, but due to a temporary reduction in your finances, you are unable to afford to pay them anything more than a small (token) payment for a set period of time. You will need to work out a budget and make a proposal to your creditors. By law, your creditors must accept a payment, no matter how small. Even if they reject your offer it is worth making some payment rather than no payment at all. This option could affect your credit rating as you are no longer keeping to your original payment agreement.
If you think this might be the right solution for you, please contact the One Money team who will be able to help you with this.
A repayment plan is an agreement made with your creditors to pay back an affordable amount each month based on what you can realistically afford. This is usually due to financial hardship or a change in circumstances, which means you are no longer able to pay the agreed amounts, but that you are making some effort to repay your debt. We can help you work out a budget showing your income and outgoings which we will need to send to your creditors. We will explain your situation and make an offer of payment. We will also ask them to freeze interest and charges which they do not by law have to do but most will agree to. This means that every penny you pay comes off the amount you owe. By law, your creditors must accept a payment, no matter how small. Even if they reject your offer it is worth making the reduced payments rather than nothing at all. This option could affect your credit rating as you are no longer keeping to your original payment agreement. You will be responsible for setting up your repayments but we can help you with this. We will look at how long it will take to repay your debts with a repayment plan and whether your financial situation is likely to improve in the near future, as other debt solutions might be better for you.
A remortgage means you replace your existing mortgage with a new one, either by changing products with the existing lender, or switching to another lender entirely. We are not able to advise on this and recommend you speak with your mortgage lender directly or alternatively seek further advice with a financial adviser.
If you would like more information on remortgaging, visit Money Helper's website.
If you are 55+ and own a property, you may access the money tied up in this property and take a tax-free cash lump sum to satisfy any outstanding debt. We would suggest you seek specialist advice from a financial adviser if looking at this option.
Friends and Family
Talking about money with friends and family can be very sensitive and personal, however it may be worth speaking with somebody you trust who may be able to help with handling your finances. It is always worth exploring these options before enquiring about debt solutions.
If you have any savings tucked away, it is worth using this to pay off your debts where possible. The interest you will be charged on your debts is likely to be more than the interest your money is making in the bank.
0% Balance Transfers
Some credit cards let you transfer the balance from one card to another. Transferring a debt from a card with a high rate of interest to one with low or 0% interest could help you pay off the debt faster.
Low or 0% interest credit cards are hard to get if you don’t have a good credit rating, so it’s worth thinking about this option before you start to miss payments.
Also look out for fees when transferring a balance. Most credit card companies charge 2-3% of the amount you’re transferring as a one-off fee. If you’re transferring a balance to take advantage of a lower interest rate, the fees might mean you save less than you expect.
If you do transfer a balance, make sure you cut up the old credit card and close the account. Otherwise, you may be tempted to keep spending on both cards and you’ll end up with two debts.
For help with debt, speak to our friendly One Money team of specialist advisers on 0330 355 1000 or email firstname.lastname@example.org