Managing Financial Debt

If your circumstances change, then that may affect your ability to meet your expenses. By contacting your Credit Union early about your loan, being open and honest, we will be in a much better position to assess the situation and offer some guidance and assistance.

Many people are experiencing financial difficulty which can be as a result of the recession; people have less income, many have lost their jobs or had their hours of work reduced. There are also other factors that can contribute to financial difficulty such as illness, a relationship breakdown, increased expenditure or poor budgeting with simply not enough money to go around. Whatever your circumstances money difficulties can affect people£s health and overall wellbeing so if you are worried about money, you are not alone. Your Credit Union will try to give you some guidance on how to manage your finances in difficult times.

Drastic times calls for drastic measures

A change in circumstances can be a big shock to the system. There are ways of coping with this change. Facing up to the problem is probably the most important step you will take. Remember, no matter how difficult your situation, debt problems more often than not can be resolved with time and effort.

1. Work Out your budget

Use the budget planner (at the top of this page) to work out your budget. The Budget Planner is for your own use, so be honest. It is important that you write down your real income and expenditure. Your income determines your Budget. How you manage your budget determines how much you have left to repay your creditors or to put money aside for things you may need in the future. A budget will also assist you to prioritise your spending. It may be that by looking at your spending pattern it will help you to make the savings you need.

2. Assess and prioritise your debt

We all carry some form of debt, some more so than others. You may have a mortgage or pay rent, a credit card, a personal loan, owe a moneylender, bank or building society, a store card or owe money to a catalogue company. Whatever level of debt you have, it is important to prioritise your debt. Mortgage/rent and electricity are your first priorities. If some of your creditors are threatening legal action then they need to be addressed as the consequences of ignoring legal issues can be severe. Do not ignore creditors£ letters or phone calls...ignorance is not bliss, ignoring your creditors may affect your credit rating.

3. Contact those you owe money to

If you are in financial difficulty, make an appointment to meet your creditors, those you owe money to. Be open and honest. It may help to explain your situation in writing and to bring this budget plan with you to your appointment.

In writing include:

• The account number or reference number
• Explain why you are in financial difficulty
• State when you will be able to start payment and the amount you can repay
• Include a copy of your current proof of income and most recent bank statement and completed budget form.

Keep copies of all letters and forms you send and receive. You will need to start keeping records of all correspondence in relation to all of your debts. If you have a loan with your Credit Union, it is important that you contact the Credit Union as soon as possible. It is important that you try to deal with any letters received as ignoring them will only aggravate the situation.

The more open and transparent you are from the start the better.

Other information to support your case should also be provided:

• Any letters you have received from your creditors or their solicitors
• Any recent Credit Union statements
• Any money lending books or statements
• Any papers or statements of your rent, ESB, telephone or cable accounts
• Bank Statements and details of any other debts
• Details of your income £ your payslip if you are working or your social welfare payment book or receipt from the post office if you are unemployed.
• Any car finance or mortgage agreements signed by you.