It is not being in debt that is an issue. Most people are probably in debt at some point in their lives, not least due to having mortgages. No, the issue is when you fall into financial difficulty and can’t manage your debt repayments.

Now while some people may have caused their own financial difficulties, by taking on more debt that they can afford to manage (often because they have been enticed by easy access to credit cards, or interest free purchase) a lot of people fall into problems through no fault of their own. There may well have been a change of circumstance that has caused the problem, e.g. loss of employment, or a marriage breakdown.

Whatever the reason that someone has fallen into trouble with regard to their debt repayments, the absolute worst thing that someone can do is to ignore the situation. This is one time when burying your head in the sand is a really bad idea. Ignoring problems with debt will only make matters worse.

If you ignore debt problems, things tend to spiral out of control:

It is therefore important to act as soon as you realise you may not be able to meet repayments:

If your debt is related to a credit contract, you can apply to the lender for hardship provision. It is a legal requirement for lenders under the Credit Contracts and Consumer Finance Act (CCCFA) to consider applications for hardship provisions. If you can come to such an arrangement with your lender, this may mean that you can pay off the debt in smaller amounts, or take a 'repayment holiday' until you are able to afford the full payments again.

In order to apply for the hardship provision, you will have to:

You can apply if your hardship has been caused by illness, injury, loss of employment, or the end of a relationship.

A debt consolidation loan is one new loan that covers all your debts. This would mean that all your individual creditors were paid off and instead you owed money, with just one lot of interest charges, to one financial provider. Debt consolidation loans are offered by most banks and other financial lenders.

If you are considering consolidating your debts, you should:

These days there are several different organisations and agencies who will help you to manage getting your debt under control. They will generally work with you to draw up a suitable repayment plan and will usually negotiate with your creditors on your behalf, not only to plan a repayment schedule but also often to get further interest charges either reduced or suspended.

Some of these organisations will even put together a system whereby you make one payment to them per month and they then pay your individual creditors on your behalf, making it much easier for you to stay on top of your repayment schedule.

Creditors are generally very open towards working with these organisations as they know it means that they have a good chance of getting their money back, the organisations having already achieved a good track record with them.

Some of the organisations who specialise in helping people with debt are as follows: