Types of Debt

Business debt

Owning your own business can be difficult and debts can start to mount when business is not going well when people are late with payments or business is slow.

Hundreds of self-employed people such shop owners, drivers and small business owners seek help each year so it isn’t the end of the road to seek help. If you are self-employed or own your own business it can be difficult to manage this whilst dealing with your own debts. If you are struggling with this then an advisors can work with you to make sure you can keep trading whilst working to clear your own debts.

 

Plastic debt

It is easy to get credit, debit & store cards and spend on them, however it can be difficult to keep on top of these bills on a day to day basis. With contactless payment and the ease of online shopping plastic debt has been rising for the average person over the last few years.

Debit cards

Debit cards are from your bank and work with your bank account allowing you to take money out when you want and spend where you want. Most bank and debit cards can be simple to use but the language surrounding is often using over complicated terms regarding APR and charges. Unlike a credit card, there is not usually a charge for using your debit card.   You will be charged for using a debit card if you attempt to make a payment when you do not have sufficient funds in your bank account.  This will result in your card being declined and the bank charging you an admin fee. Another way to incur debt with your debit card is from using an overdraft. Overdrafts allow you to borrow money at ease but come with charges for usage and going over your limit which can be as much as £10 per day.

Credit card

When you apply for a credit card you will have agreed to the terms and conditions that apply to that card.   Each card will have a spending limit and a minimum monthly repayment.  Some cards also charge a fee.

You should always be aware of the interest level that is charged on any credit card that you have, as these can increase depending on the agreement you have.  If you keep a balance on a credit card, this will generate interest payments that will be added to your debt, and this will be paid on a monthly basis.

If you use a credit card to withdraw cash, you will probably be charged a fee plus a higher interest rate.

Store cards

Store cards are very similar to credit cards, and you must fill in an application form and undergo credit checks to qualify for one.  Store cards are issued by shops usually with an discount offer at the start that makes them seem like a better way to for things but this can cause serious financial issues further down the line. Most store cards have a much higher interest rate than credit cards do, which makes them an expensive form of borrowing.

Council tax

Council tax should always be thought of as a priority bills the same as your mortgage. If you fall behind on your council tax payments your local council can turn around and ask for the full amount left on the financial year and not just the missed payment.  This payment can end up being many hundred pounds and could cause you serious financial issues so we suggest that you always try and keep money aside for this.

However if you are not able to pay your council tax then your local council may be able to contact your employer and take it straight from your wage without your permission. In the worst cases of not paying council tax you can even be sent to prison for up to 3 months.

If you are struggling with debts simply fill in the form above  to speak to an advisor to see what can be done to help you.

Gambling

Gambling is all around us now and is easier than ever because of the internet and more and more local bookies. What starts as a bit of fun with friends can quickly turn into a serious habit which can devastate your life.

People with gambling debts have often borrowed from other places in order to fund their gambling such as credit cards and overdrafts. This can lead to serious debt issues as you may borrow more and more to get that one big win to pay off your debts.

Gambling isn’t seen as a bad thing as it use to be and because of that it is much more common to get in financial trouble because of it now. If you have encountered serious financial difficulties due to gambling or other reasons contact us on the form above and an adviser will work to find the best financial solution to help you.

Income tax

Everyone in the UK has to pay Income Tax if their income is over a certain amount.  If you are in employment you will pay directly through your employer. This is much more difficult if you are self-employed, then you must complete a self assessment tax form that will reveal how much tax you should be paying.

Whereas if you work for someone then this comes off automatically but if you work for yourself then you need to keep track and put aside the money. If you have issues managing your money and saving then this could be difficult as come the end of the tax year you will need to pay the full bill which could put you in serious debt.

Utility bills

Some people can manage their finances and major bills each month with ease but it is the smaller recurring bills that can cause issues. With recurring water electricity and gas bills being increasingly expensive it is far easier to find yourself falling behind with payments it is important to quickly do something about it.  Ignoring the problem will not make it go away, it is likely to get worse.

Even though you are not likely to have any basic services cut off these days if you miss several payments or if you pay late we always advise to be open and honest with your supplier about late and missed payments as communication is key to fixing your finances.