Money : Debt

Debt is seen as a negative thing however it is important to point out that everyone has some debt from a mobile phone contract to rent on their flat but what happens when it’s no longer manageable and how should you deal with it? 

What is debt?

Debt is simply when one person owes another something. Thanks to the student loan and fees it is estimated that the majority of students will graduate with a minimum debt of £20,000.

Top tips for dealing with debt

Act quickly - As soon as you realise you can’t make a payment, seek help and tell the person you owe money to. If you let them know why you can’t pay, they might be more reasonable.

Pay something - If you owe £50 but can’t afford to pay the whole amount in one go work out whether you can pay something towards it as paying a few pounds is often better than paying nothing. It will also start to pay off some of your debt rather than letting it mount.

Maximise your income - Find out if you have all the money you are entitled to such as grants and loans and maybe look into getting a part-time job. There is also the Access to Learning fund which can help you out if you're struggling to make ends meet, go to your university advice centre to find out what you're entitled to.

Prioritise - Some debts are more important than others so sort out any which could have serious consequences such as not paying your rent could put you on the streets.

Budget - Showing that you have a plan to pay back any money might help your case when looking at extending the loan payback period. It should also make things seem a little less scary if you know how much you owe and exactly how you are going to pay it back. Find out more about budgeting.

Borrow carefully - Borrowing money to pay off your bills or rent might seem like a good idea because you’ve paid that particular bill however you’ve just added a considerable amount to your debt thanks to the borrowed money. If you really need to borrow think very carefully about whether you will benefit from it in the long run and how you will make the repayments. Always get advice first.

Contacts

The time to press the panic button is if your rent is due but you spent all your money last weekend. Head to your university student advice office where they will have Money Doctors or dedicated advisers on hand to help you organise your debts and work out a way forward. There is also the National Debtline and the Consumer Credit Counselling Service who are the experts in drawing up plans to manage debt including advising on how to make proposals to creditors to reschedule payments so that they become manageable. The local Citizens Advice Bureau should provide debt counselling within a wider context.