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Five Stages of Dealing With Debt

Dealing with debt is a process which is usually completed in five steps. We explain what these are here.

In this article, we'll cover:

  • Denial
  • Panic
  • Self-determination
  • Frustration
  • Acceptance

Growing debts can be isolating and we may find ourselves struggling alone. If you’re determined to accept your debts now and start looking to the future – click the button below to skip the first four steps:

Get Debt Help

01. Denial

Overspending is easy and lying to ourselves about it is even easier.

A couple of luxury spends or even an emergency you weren’t counting on, things add up. Sometimes we will avoid checking our bank balance so we can’t see the damage but that’s the worst thing we can do. Living in denial will only allow the situation to get worse.

Often, we tell ourselves things will be better next month.

If that’s the case, then no problem! A careful budget and cutting out luxuries can bring us back to our usual income and outcome.

This isn’t always the case though, and many of us find it just gets worse and worse every month.

02. Panic

This is when we start to panic.

Bills keep piling up, without paying them back the interest charges only increase, and then you have creditors sending you letters and knocking on your door.

Now we have two options.

Either we can accept our situation straight away and see what help we can get, or we can try to pay back our debts without help.

03. Self-determination

Self-determination can be a great strength but dealing with financial problems alone can be a hindrance and make the situation worse.

We can be inclined to deal with money issues privately because there’s a lot of stigma around it and maybe we find it embarrassing. But more often than not, dealing with debt alone doesn’t work. If you owe a large amount of money, cutting back expenses and even taking a second job probably won’t be enough to help your situation; and you’ll just be allowing your interest rate to grow.

04. Frustration

You’re frustrated! Of course, you are. At this point, you’ve probably tried to no end to find a solution to your debts.

Financial issues often lead to issues with our relationships and sometimes can cause problems with our mental health. Don’t let a situation like this get out of control. Always speak to someone if you’re finding your problems overwhelming and feel like you can’t deal with them anymore.

Thankfully, this is normally the time when most people take action. We need to look to the future and start making positive forward steps.

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10. Acceptance

It’s time to accept your situation. You’re in debt. There’s no need to feel embarrassed or worried because there are specialist debt companies – like us – ready to help you in a judgment-free zone.

There are plenty of solutions out there no matter the size of your debts so see what options are available to you.

By contacting us, you could start the process of getting a consolidation loan. This debt solution is something that gives you the funds you need to repay creditors – and start making one affordable monthly payment.

Click the button below to find out more, and see if you qualify:

Get Debt Consolidation
Our author Lily

By: Lily Ruaah.

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Unsecured Loan Representative 69.9% APR

Borrowing £7,500 over 36 months, repaying £502 per month, total repayable £18,083. Total cost of credit £10,583. Interest rate 69.9% (variable). The lenders on our panel offer loans for 12-60 months, with rates from 5.8% APR to 89.9% APR. The Representative Example is based on all loans paid out by lenders between 19th Apr 2022 and 23rd Dec 2022.

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If you choose to add fees to the loan: Assumed borrowing of £25,000 over 120 months, plus a broker fee of £2,500 and a lender fee of £250 would result in monthly repayments of £345.55, the borrowing rate is 8.6% (variable), the APRC is 11.7% (variable), total charge for credit £16,466.00 and the total amount payable £41,466.00. You can opt to pay the lender and/or broker fees upfront, your adviser will discuss these options with you.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. All rates vary subject to loan amount, loan type and status. Repaying your debt over a longer period of time may increase the amount you pay.

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