Talk to someone, prioritise your payments and seek advice if you’re facing debt issues.
That’s the message from the Isle of Man Office of Fair Trading’s Debt Counselling Service, who have offered advice to anyone struggling to make ends meet after Christmas.
Firstly, don’t ignore the situation, the OFT said: ‘As hard as it may seem, the first thing you must do is talk to the people you owe money to - don’t just stop payments without explaining why. People and businesses you owe money to can sometimes be more understanding than you’d expect.’
The next thing to do is to work out which debts are your priorities, such as mortgage payments, rent, tax, child maintenance, and utilities, and pay them first.
The OFT said: ‘Don’t fall into the trap of paying whoever shouts loudest first. Work out a budget that covers all your income and essential outgoings.
‘Only offer to pay off debts at a rate you can keep up - it is easy to be panicked into offering more than you can afford.’
They also warned consumers against borrowing more money to pay off existing debts, and urged them to be particularly wary of companies that offer to lend you money to ‘solve’ existing debt problems, especially if they want you to take out a second mortgage or a high interest loan.
The OFT’s Debt Counselling Service offers free, confidential advice to anyone who is facing financial difficulties, call them on 686510 to arrange an appointment.
Their website www.gov.im/oft/money/debt_counselling.xml features draft letters to send to creditors and a self-help booklet that provides information including a budget sheet and interactive tools to help manage debts.
They can also offer advice to anyone facing legal action over unpaid debts, and can liaise with creditors to help organise repayments.