Parents who buy a puppy or another pet for their children at Christmas quickly realize that a cuddly animal comes at a cost. For a start, it begins to grow up. It has to be fed, watered, exercised, sheltered, groomed, get veterinary attention including shots, be house trained and walked on a daily basis. As time goes on, pet maintenance costs increase and children can not be relied upon to even look after the caring and exercising duties.
So it is with Christmas debt and indeed for personal debts incurred at any time of year. Whether the debts incurred are credit cards, personal loans or overdrafts, the debtor has a duty of care to ensure that he or she tends to the obligations undertaken when the funds were borrowed. The big obligation of course is to repay the totality of funds borrowed as well as any interest incurred on an ongoing basis. It is likely to be a lot easier and quicker to sell the family pet than to repay such borrowings. Just as a puppy is not just for Christmas, neither are debts.
You cannot ‘sell’ such debts as you could a puppy. Neither can you have loans ‘put down’, however humanely you might wish to so do. If you find that you cannot repay personal borrowings however there are solutions available. First thing to do is to take stock of your situation. Quantify the problem. List all of your debts and the contractual payments on them. Verify your income from all sources. List your living expenses ensuring all priority debts (such as your mortgage or rent) are included. See how much income you have left over with which to repay your debts. Go to one of the advisory bodies to get advice and guidance. These include Citizens Advice, Consumer Credit Counselling Service, National Debtline and Christians Against Poverty. Consider seeking advice from one of the excellent commercial fee charging insolvency services companies, of which there are many nowadays in the marketplace. Determine whether you are insolvent or not.
Establish what your options are in addressing your debts. Make a decision as to what option suits you best and go for it. Chances are you will choose one of the following – depending on whether you are insolvent or not: Bankruptcy, Individual Voluntary Arrangement, Debt Consolidation, Debt Management Plan, Debt Relief Order, Sale of Assets (repaying debts from the net proceeds), remortgage property to release equity with which to repay debts or perhaps a family member or friend can provide funds to enable you to repay your debts.
It is important to understand what each of these options entails before you plump for one of them. Remember, there could be a negative effect on your future credit rating and on your future ability to borrow funds particularly if you do not repay your creditors in full. Whatever you decide to do it will certainly be more demanding than caring for a family pet but it could also be ultimately more satisfying as you come to grips with your personal debts.