According to Andy Williams, Christmas is supposed to be The Most Wonderful Time of the Year. But if you can’t relax because you’re worrying about how you’re going to pay for it all then you might not be feeling the Christmas spirit.
Many thousands of people get themselves into debt around Christmas time. Christmas seems to come to the shops earlier and earlier each year and the pressure to buy beyond your means is relentless. The introduction of the Black Friday Sales over the last few years have only aggravated this phenomenon.
The following post is to guide you as to which Christmas UK debt solutions are the best for your circumstances. The main thing to realise is that everyone goes a little overboard at Christmas time and it’s something that can be fixed. All that is required is a little research and some patience.
The UK’s Christmas debt statistics are enough to make anyone spit out their mince pies in amazement:
These scary statistics show just how many of us are lured into debt by Christmas. If anything, these figures might actually make you feel a little bit better - they show that you are not on your own if you overspent!
In the first two statistics, a whopping 75% of people chose to put that debt onto a credit card. If you can afford to pay it all off in January so you don’t get slammed with interest, that’s fine. But for the majority of people that can’t do that there’s going to be a whole lot of interest added. You can get help with paying off credit cards by contacting us today.
It’s because of this added interest that people are still counting the cost of Christmas months after the event has been and gone. To make sure that you don’t become part of these statistics, what Christmas UK debt debt solutions would work out the best for you?
Here are some of the best tips to avoid Xmas debts:
Making a pact with a family member or friend to only spend a certain amount on each other will help to keep your budget under control. It may feel like you are being tight-fisted, but buying only for children and not their parents will also help. You would be surprised how many parents understand this logic.
By shopping online you can save on shoe leather and compare prices so much easier than you can going from shop to shop. You also have the convenience of it being delivered to your door saving on travel costs.
Use Facebook for something other than looking at videos of cute animals; there are loads of local selling pages and Facebook has its very own marketplace. Check out eBay, Schpock, Gumtree and other similar sites to see if you can pick up a bargain. You know what they say; ‘One man’s junk is another man’s treasure’.
With something like a Tesco Clubcard you get loyalty points for every purchase that you make. When Christmas time comes around see if you can use them towards buying gifts or even the Christmas dinner. Boots have a well-publicised 3 for 2 offer on every year - take advantage of offers like these.
Likewise for coupons and gift vouchers that you don’t know what to spend on. Every little saving you can make is money that you don’t have to find after Christmas has gone.
We’ve all been there. You always get one present where you think, ‘Why on earth would you think I would want that?’ Rather than have it take up valuable space at the back of your wardrobe, put it on an auction site and make some money off it.
Everybody knows someone that starts their Christmas shopping in January and puts it away until December. Well, they’re onto something there. By spreading out the cost over a larger amount of time you won’t put yourself under unnecessary mental and financial pressure.
Try making handmade gifts for your nearest and dearest to keep your overheads down. Photographs, calendars, jams and jellies - anything that you can make with your own fair hands. People appreciate the personal touch and you could save a small fortune doing it.
Don’t feel like you have to buy the Extra Special Luxury edition party food. Tests of a variety of brands are conducted every year and the cheaper brands nearly always come out on top. Hide the box if you must so that no one will know but don’t break the bank on the pigs in blankets.
As tempting as it may be, DO NOT USE YOUR PLASTIC. It’s all too easy to hand over a store card or credit card and worry about the consequences later.
The Christmas Spending statistics in the UK make for grim reading. Research shows that in the month leading up to Christmas alone we borrowed a staggering £1.5 billion on credit cards and loans.
Six out of ten of us make sacrifices at Christmas in order to pay for presents, while 34% of us put Christmas on credit cards and loans because we have no other option. Personal debt is the highest it has ever been, and a lot of people are saying that it is due to the aftermath of Christmas.
What is even scarier than these statistics is the one that says even though one in eight people will suffer with their finances, only one in a hundred would seek advice. You can get help here for solutions such as debt consolidation loans and other advice.
There is always a solution to be found. If you are the one in eight people then please do not stay in that situation. Work out your finances to see how much you can realistically afford, seek professional advice and you can change your situation around quicker than you might think.
We know how much expectation is put on you for Christmas to be perfect. Perfect can be expensive though, and you might considering taking out a Christmas payday loan to fund the festivities. Surveys suggest that we spend £25 billion in December.
As the big day looms ever closer people turn to payday loans to fund the last minute shopping. There is always a sharp increase in payday loans being taken out in the run up to Christmas. Although it’s not advisable it is understandable. Most payday loans offer to have the money paid in your account within fifteen minutes. On average, 3% of us will turn to payday loans to fund Christmas.
Only use Christmas payday loans if there is absolutely no other option available. Their interest rates can be astronomical and you will find yourself in serious financial difficulties if you do not keep up with the repayments.
If you must apply for a payday loan only take out what you can afford to pay back and use it to purchase something essential like food. DO NOT use it to buy presents!
If one of your Christmas UK debt solutions is to write off your Christmas debts then you need to think long and hard about it first. The only way to write off your debts is by going through legal processes involving the courts. There are three options available and each one can have a devastating effect on your credit file.
An IVA is a form of insolvency as a way of sorting out your debts. This means that you have come to a point where you can no longer realistically pay your debts because you don’t have enough income to cover them. The only way to solve your problem is by going through an Insolvency Practitioner.
An Insolvency Practitioner (IP) will go through your monthly budget and work out how much you can realistically afford to pay your creditors after all your expenses have been paid for. An example of one of these is the Hanover Insolvency Practitioners who we can provide more details on.
Normally for an IVA to be granted you need to have more than one creditor that you owe money to and are at least £5,000 in debt.
Once your budget has been worked out, your IP will represent you at a meeting with all of your creditors. They will then vote on whether or not to accept your proposal.
If 75% of the creditors agree to your terms then all of your creditors are legally obliged to honour it, even of they voted against it. At this point all interest and charges are frozen until the debt is paid in full. If there is any outstanding debt at the end of the IVA, it is written off.
You will now only make one monthly payment to your IP. They will take a fee out of each month’s payment for managing it and then distribute the rest amongst the creditors.
An IVA runs for five years and you are not allowed to take out any credit during this time unless your IP specifically allows it. If you apply for credit without their knowledge you run the risk of the IVA being nullified and you will be liable for the original debt.
Bankruptcy should only be considered if the amount of debt you have is crippling and you have no realistic chance of paying it back.
Bankruptcy has a unfortunate stigma attached to it where it is deemed to be a shameful act. Nothing could be further from the truth and most people who do find themselves in this position don’t want to be there. With the cost of living rising steadily and wages stagnating more and more people are finding it the only way to cope. Get more help with bankruptcy if you need it today.
You will have to pay to go bankrupt. This will cost anywhere between £525 to £705 depending on your situation. This in itself may be hard enough to find if you are already struggling. The equivalent for people in Scotland is applying for Sequestration so feel free to get in touch for more details.
The Official Receiver (OR) will decide if you have to pay your creditors anything. If you have enough disposable income left after paying your bills then you may have to make a contribution to your debts for up to three years. This is done with one payment every month to the OR who distributes the payment accordingly. If you don’t have anything left then you won’t be asked to pay anything.
Once the bankruptcy has been approved by a judge all interest and charges are frozen. Most people are discharged from bankruptcy after one year. Once you have been discharged, either the vast majority of your debts or all of them will be written off.
This is not the end of it, however. The bankruptcy stays on your credit file for a further five years and you are seen as a high risk lending prospect. You will find it extremely difficult to pass for any further finance during this time.
A County Court Judgement, or CCJ as they are more commonly referred to, is when a company or companies has applied to the court to retrieve the money you owe them. This could be because you have been ignoring their letters. The court look at your case and decide how much you need to pay. They will then send you a summons which you have to reply to within 14 days.
Once a CCJ has been granted, you will make one payment to the courts and they will distribute this amongst your creditors. As long as you honour the terms of the agreement and stick to your payments, your creditors are not allowed to contact you further about the debt.
If a CCJ is issued DO NOT ignore the paperwork for it. Return it within the 14 days or you will be in breach of the terms. This means the court then has the power to send bailiffs to your home and repossess your belongings to pay your debt.
This is not a ‘write off’ in a traditional sense but if the court agree to monthly payments it may give you enough breathing space to sort out your finances.
The best way to pay off Christmas spending is to make a list of all the sources that you have used that need to be paid back. This is everything from overdrafts to payday loans, store cards, credit cards, and personal loans.
Once you have determined how much you owe and how much you will be expected to pay for them all, see what the best way of streamlining and condensing them would be.
The only thing worse than a Christmas hangover is a Christmas debt hangover. Spending so much on Christmas that you end up paying for it until the next Christmas is no joke, it is a startling reality.
The best Christmas UK debt solutions to avoid a Christmas hangover are:
Add up everything that you bought on credit that you wouldn’t have purchased in any other month of the year. Everything from gifts to wrapping paper to mince pies. Once you have a figure you can set about dealing with it.
Hide your credit cards. Cut them up if you need to but don’t use them anymore. They are on life support as it is and can’t stand any more shocks to the system.
You overindulged in December and now it’s time to get back into shape. We’re not talking about the gym here, we mean your financial health. Cut back on the little treats such as going out for lunch or a coffee and put the money towards your bills instead.
As well as your regular essential monthly expenditures like mortgages and utilities, give your debts the same sense of priority. The quicker you pay them off the faster the interest will come down. In the long run you’ll have money to spend.
Don’t put yourself in a position where you will be tempted to spend money. Stay away from shopping malls and don’t surf shopping sites on the internet (especially if you’re drunk - that never ends well)