Debt Counselling

No debt problems are unsolvable

It might not be easy or quick, but there is always a way out of debt. Debts are urgent; they grow rapidly over time, and speedily spiral into trouble. The earlier you deal with them, the easier they are to deal with.

Being in debt is not just a financial issue, but feeds into all elements of your life. Finding solutions are wide and varied; from cutting interest costs, budgeting, or simply where to find free, one on one help such as the Citizens Service Centre (Similar to the Citizens Advice Bureau in the United Kingdom) based in Cyprus.

Are you in debt crisis?

There are two ways to deal with debt problems and which one is right for you depends on whether you are in what is technically defined as debt crisis or you just have worrying or large debts. What counts as debt crisis depends on whom you ask.

A loose definition is as follows.

Debt crisis is when you cannot afford to make even the minimum repayments on all debts or meet all necessary outgoings.

Therefore, even if your debts are big, if you can service them, even at the minimum level, you are not in debt crisis and a different solution applies.

No-one ever wants to get into debt

It comes from spending money you do not have. This could be for frivolous reasons, or you may have had an awful change in circumstance, like a partner dying, personal illness, divorce, mental health problems, or losing your job. Yet however, good or bad your reason for getting into debt, from now on, the most important thing you can do is get a disciplined handle on your spending.

Debt is a symptom not the problem

Before tackling it, you must reduce your spending, not only to stop you borrowing more, but to also maximise repayments.

The prime aim of this article is to help you cut the cost of your debts

Nevertheless, if you do that without examining the bigger picture of all you are spending, it will be wasted. That is why in this article, the prime focus is on cutting the cost of your debts themselves, rather than looking at the bigger picture of all you are spending.

How bad are your debts?

If you are wondering how bad your debts are, as the old adage says, size is not everything. What counts is your debt in proportion to your ability to repay.

Are your non-mortgage debts bigger than a year’s salary after tax?

If your non-mortgage debts (usually credit cards and loans) are more than a year’s salary after tax, then they are quite severe; after all, that means you would need to work more than a year to repay them, even if you had no outgoing expenditures.

If you need to talk to someone on a one to one, Citizens Advice can also help.