How Serious is Your Debt Problem?

Realising you have a serious debt problem usually happens when you start to feel the struggle. The creditors are hassling you and there are problems paying your bills.

Try asking yourself the following questions:

• Do I pay more out than I have coming in?
• Do I struggle to repay the loan and credit cards each month?
• Can I only afford to repay the minimum repayments each month?
• Am I getting further into debt as the months go by?
• Are my creditors always chasing me?
• Do I have any CCJ's or threats of legal action?
• Am I always getting red letters?
• Is my debt significant when compared to my income?
• Is debt causing me problems at home?

However, just because your debt problems are serious doesn't mean you have to go bankrupt.

Consider your Personal Circumstances

When deciding on a debt solution it's important to consider your personal circumstances and your objectives for the near future.

For example:

• Do you have assets, such as a house, to lose?
• Would you have to change profession if you went bankrupt?
• How long will it take you to repay your debt without the help of an IVA or bankruptcy?
• Would a simple financial review and loan consolidation help?
• Do you want to keep your current business operating? Bankruptcy would mean its closure.

Understand the Consequences

Any serious debt solution has consequences and it's important to understand what they are. Bankruptcy is the most consequential and is usually considered as a last resort.