What is Debt Awareness Week and why is it important?
Debt Awareness Week is a yearly event put together by StepChange Debt Charity which aims to raise awareness on issues related to debt. Its main purpose is to motivate those struggling with debt to get help as soon as possible. By doing so, it could help minimise the negative impact on finances and mental health.
Many people who are experiencing debt for the first time are unsure about where to go for help. A 2023 StepChange poll showed that one in six (16%) of people weren’t aware that debt advice organisations exist and one fifth (21%) of people wrongly thought that contacting a debt advice organisation for help would have a negative impact on their credit score.
This year’s campaign is all about tackling the obstacles that stop people from seeking debt advice. One key focus – breaking the stigma that’s all too often associated with being in debt.
Problem debt is on the rise
Times are tough, and with the cost-of-living crisis, many people are finding themselves in a tight spot financially. Last year alone, StepChange saw a 7% increase in individuals seeking debt advice. With rising mortgage arrears and a predicted £1,400 increase in unsecured debt per household, it’s no surprise we’re seeing more people struggle with debt.
However, it’s important to remember that if you’re finding it hard to get by, there’s always a way to work through your debt. It might take some time, but there are solutions out there. Dealing with your debts as early as possible can make them much more manageable.
The importance of getting debt advice
Getting advice on your debts can be beneficial, especially if you’re not sure of the best way to handle them.
Here’s why it’s a good idea to seek out debt advice:
Tailored solutions: Professional debt advisors can offer personalised advice based on your specific financial situation, helping you find the most appropriate strategies to manage and reduce your debt.
Understanding your options: There are various ways to deal with debt, including Debt Relief Orders, Debt Management Plans, IVAs, and Bankruptcy. A debt advisor can explain these options in detail, helping you understand the pros and cons of each.
Avoiding legal action: By taking action early and seeking debt advice, you can potentially avoid legal actions from creditors such as being taken to court.
Negotiating with creditors: Debt advisors can often negotiate with creditors on your behalf to freeze interest rates, reduce payments, or even write off part of your debt, depending on your circumstances.
How can MoneyPlus help?
MoneyPlus can help provide the support, tools, and advice you need to overcome debt, leading you to a more manageable financial situation.
We believe in a personalised approach to managing debt and recognise that each individual’s situation is unique.
We’ll discuss all available options with you, and whilst we will recommend a solution for you, you’re under no obligation to proceed. Fees will only apply for all managed solutions. Below you’ll find our most popular debt solutions.
Debt Management Plan
With a Debt Management Plan (DMP), you enter into an informal agreement with your creditors to settle your debts. Our experts will help you in determining an affordable payment amount, leading to a single, consistent monthly repayment which is then distributed among your creditors. There’s no fixed commitment period, and should your financial situation change, you’re free to adjust your repayment plan.
Individual Voluntary Arrangement
An Individual Voluntary Arrangement (IVA) is a formal contract made with your creditors. With an IVA, you commit to a manageable monthly payment for a set duration which is typically between five to six years.
If successfully completed, any remaining unsecured debt included in your IVA will be written off after this period. However, failure to meet the terms could result in the IVA failing, and debts may remain payable.
An IVA also protects you from creditor harassment, legal action, asset seizure, and further interest and charges.
Read more about the IVA process.
Breaking the stigma around debt
Talking about debt is something many of us avoid. Often, money is seen as a subject we shouldn’t talk about. People might feel ashamed or too embarrassed to share their financial struggles or to ask for help, and as a result, many suffer quietly. But needing advice or help with money is nothing to be embarrassed about.
In fact, reaching out for help is a brave first step in getting a handle on your finances. Just by reading about how to deal with debt, you’re already moving in the right direction. Looking for advice on money and debt is a smart and responsible move towards improving your financial situation.
