If you fail to maintain payment you can’t use a debt management company to help you out.

Remember that a secured loan is secured from the lenders point of view, not yours. They have the security of knowing they can force the sale of your home should you fail to maintain payments.

Turning unsecured dent in secured debt, so to can spread the payment over a longer period may seem to be a solution to unaffordable credit repayments, but the consequences of not being able to maintain payments are worse. A least with unaffordable unsecured debt, you can use the services of an debt management company to get payments reduced, but they can’t help with secured borrowing.

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You are playing into the card issuer’s hands, effectively borrowing money at a high interest rate.

It is better to repay the minimum than nothing at all, but in reality you are treading water and playing into the card issuer’s hands.

Card companies have been forced to put warnings against paying just the minimum balance on their statements and with good reason.

It would take 15 years to pay off the £3,000 balance on a 14.9% APR card if only the minimum payment of £90 was made.

You would nearly halve that time if you paid an additional £60 a month.

For many people with various debt problems, usually their credit cards carry the highest APR for all their debts, therefore it make sense to target paying back credit cards rather than lower interest overdraftsa and bank loans.

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Get in touch with your most important creditors and try and re-negotiate your monthly repayments

By most important we mean those to whom non-payment is most serious, eg your mortgage or those charging you most interest.

The sooner you ask for help once you find you are having difficulties, the better for you.

A common problem we find is that creditors are only aware of a problem once accounts are in arrears. If you know you are not going to miss payments, or are not going to be able to catch up with arrears any time sooner, speak up.

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On average people whom we place on a debt management programme or IVA actually owe 28% more than they originally tell us.
Those who choose ignore the problem and frequently miss payments are often in for a shock as extra interest charges and charges for missed payments are added to the debt. Get current balance statements from each of your creditors so you know the exact extent of the problem before considering options to tackle it.

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