You have probably heard the phrase that prevention is better than cure. Well to avoid the debt spiral that could potentially lead to bankruptcy means that you are probably applying this phrase to your financial life. The worst fear for many is coming to the realisation that more money is going out of your pocket, than the money coming in. However the truth is that it is actually in your lenders favour, to try to set up a new affordable payment plan for you to adhere to.

Today UK debt problems are huge and many of the UK lenders have been accustomed to dealing with people suffering from severe debt problems. Trying to avoid going bankrupt in the UK is something that you should be aiming for, with every ounce of your being. Even though on one hand it means that all your existing debt is erased, on the other hand you forfeit your right to a bank account, which is a very serious set back considering the modern time frame we are in today.

Also you have to bear in mind that having access to credit is absolutely necessary for any plans for the creation of wealth, which is terrible if you are bankrupt, as you will have to wait up to 6 years to be able to apply for credit. So it is really imperative that you do your absolute best, to ensure that you do not find yourself in this situation. Another point to remember as well is that all of your assets deemed disposable excluding essentials, will be seized and sold in order to pay your creditors.

To get the ball rolling the first action you must take is to contact your creditors by way of a letter, the moment you become aware that making repayments is going to be a problem. In the letter it is vital that you tell them the reason why it is to be a problem, as well as trying to put forward another repayment proposition to them. Try to make them a guarantee, that as soon as you’re financial situation gets better you will recommence the former repayment plan. Make sure you offer significantly less than you can afford to repay. This way you will get a head start if they were to insist on something higher.

Make it very clear to your creditors that you genuinely wish to clear your debt and always be polite. Make a request to see if the interest on your debt could be frozen, informing them that this is the only real way that you will be able to clear the debt. Many lenders are likely to agree to this term for a trial period. The chances are that if you struggle to meet the reduced payments, you will then be probably referred to a debt collection company in which case your interest will be frozen automatically.

If you decide to do nothing about your debt you’ll then most likely be issued with a default notice, which can negatively affect your credit rating.