Friday, October 21, 2011

Do you suffer from ‘bill phobia’?

For many people, personal finances are tighter than ever. Rising unemployment is leading to a culture of fear. Low levels of personal savings and assets add to the concern of insecurity.

Inflation is making the cost of living ever more expensive and many people are also dealing with the worry of high personal debt levels, often from a combination of credit cards, online loans, car loans and mortgages.

It's fair to say that the current economic situation is fairly difficult for many and showing little sign of letting up. Growth projections aren't good and many things may get worse before they get better - for example, if double dip recessions become a reality.

Many people are also trapped onto expensive legacy financing agreements that are locked in at far higher rates than are available now. The cost of interest can end up outweighing the original loan sum if the debt is repaid over a long period of time.

It's no wonder that for many, the sight of yet another bill on the doormat is just a step too far. More people than ever literally aren't opening their bills and adopting a 'head in the sand' approach in the hope that the problems will go away. You'll know if you have bill phobia, if you are piling paper bills into a corner and pretending you can't see them, or deleting online bills and taking the same 'I saw nothing' approach. Sadly, bills never go away if you ignore them! A late payment can impair your credit record if left unchecked. Missed loan payments will lead to hefty charges and fines and can escalate into ever bigger problems. The important thing is to flag up problems quickly and seek advice from the lender, or from a debt advice organization. There are different organizations, some of which are government-sponsored or charitable. These are best to approach first for their independent and unbiased advice. They may ask you to work up a careful budget and understand if it is possible to meet your bill repayments by either decreasing your outgoings or increasing your incomings.

They may also be able to advice on sources of financial help or funding, particularly if you are eligible for government sponsored support or tax breaks, for example.

It can also be worth looking at consolidating existing credit card debts onto a single low or zero balance account, to save hefty amounts of interest charges in the long term. Low interest online loans can also offer a better solution and many online loans are priced more competitively than with high street providers.

If you are in financial trouble, other schemes such as debt consolidation may offer a practical solution to a struggling individual.

Alternatively the financial provider may be willing to offer a payment holiday or other terms to ensure that the debt isn't defaulted on.

The important thing is to deal with the problem as quickly as possible and not allow it to escalate and grow. This means tackling bill phobia and overcoming it! Know that you are not alone and in the same position as many others. There are even help and support groups dedicated to tackling financial problems and these can be a valuable source of advice and help during a difficult time.

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