How to tackle your debts if you overspent this Christmas

December 22, 2017

We all look forward to Christmas and the chance to spend quality time and swap gifts with our loved ones. Unfortunately, however, the celebrations can seem a distant memory when January rolls around and credit card bills begin to hit the doormat. If you are regretting relying on credit to pay for Christmas, you are not alone. In fact it is estimated that more than a third of Brits have borrowed money by way of credit cards, store cards, or overdrafts, in order to buy presents for their loved ones this festive season.

If you have spent more than planned, it may be tempting to bury your head in the sand and ignore the situation. However, this is the worst thing you can do. The money you owe will not disappear by ignoring it, in fact, you will find your problems worsen as late fees and interest gets added to your outstanding balances. No matter how scary it may seem, you need to confront the issue head on and put a plan in place for dealing with the debt you have built up.

The first step is to open the credit and store card statements as they come through the post. In order to solve your debt problems you need to know exactly how much you owe and to whom. When you have this information you can then start to see whether the monthly payments on your debt are affordable in relation to the income you have coming in. Draw up a budget which clearly shows how much money you have coming in and how much money is leaving your account on a monthly basis. Your outgoings should take into account absolutely everything that you spend in a month; this includes all your direct debits, your food bill including any takeaways or meals out, plus anything you spend on entertainment, travel, clothing, and hobbies.

If the sums don’t add up, and you can see yourself having difficulty in making the required minimum payments while also keeping on top of your everyday living costs, then you should take immediate action. The worst thing you can do is to take out further borrowing in order to fill this income gap. While this may ease your worries in the very short-term, it will not be long before you find yourself being thrown deeper into the debt spiral.

Your best move is to contact a debt expert who can talk you through the options available and work alongside you to devise a plan moving forward. There are a variety of formal and informal debt solutions out there, all of which could help you get back on your feet and ease the burden of your borrowings. Each solution has its own positive and negative aspects and it is vital you explore every option before committing to one.

At Northern Ireland Debt Solutions, we can advise you on the best possible course of action whether that be a Debt Management Plan, Individual Voluntary Arrangement, or Bankruptcy. Contact us now to arrange a free initial consultation, and begin your journey towards a debt free future.

Lawrence O'Hara

Insolvency Adviser

Tel: 028 2132 6269

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