In the UK we have the Citizens Advice Bureau (CAB) to turn to for practical words of assistance when we are struggling with debt. And as the agency’s own data shows, the number of people in the UK struggling with loan repayments, mortgage arrears and credit card or overdraft balances has risen sharply this year already. There has been a 179% increase in redundancy related enquiries at the CAB as well – which just shows how incredibly important it is to have such support in place.
Sadly, expatriates can sometimes feel very isolated if they too face the same hurdles such as debt or job loss. In certain nations there are free services similar to the Citizens Advice Bureau, but in most there aren’t – and whilst expatriate networking groups can lead you to make new friends who may in time offer you emotional support, if you get into difficulties where can you turn?
The CAB in the UK will lend an ear to you, and they can advise with regard to UK based debt issues of course, but they may not be able to assist you with overseas related problems, and may only give you generic information about how to proceed. So, where can you find practical help for expatriates in debt? Right here! There follows a seven-stage plan of action to help you get on with your life in full control of your circumstances…no matter how dire they seem. Whilst you might want to run away from your problems or bury your head and forget about them, the only real way forward towards freedom is if you tackle your issues head on.
1 Stop the Spiral
Debt and the ensuing problems spiral out of control very quickly – but you can stop the spiral by taking stock of your situation. Today is the day that you bite the bullet and begin the attack on your finances. If you keep putting it off, you keep putting off recovery and you prevent yourself from moving forward and feeling better. So, get out all your paperwork and make a detailed inventory of what you owe and to whom. Then, alongside each figure note the interest rate that you are incurring on the figure, any arrears that you have and whether the sum of money is secured on anything such as your home if it is your mortgage, or your car if it is motor related finance for example.
This will help you set your payment priorities.
2 Prioritise Your Payments
Whilst your priorities may be paying off the lender who is shouting loudest, your priority should really be to keeping your home. Therefore, anything you have that is secured on your property should be your number one priority – then look at which debts accrue the most interest and work on those next.
3 You Don’t Have to Do it Alone
Even if the likes of the Citizens Advice Bureau can’t help you as an expatriate, a debt counsellor could perhaps. You see, you’re not the only one with financial strife – and what’s more, no one nationality or type of person is more likely to suffer financial hardship than another. Sometimes it helps to know these facts and keep them in mind, and by working with a debt counsellor you can gain the support you need in the face of threatening computer generated letters from banks, and you can work to ensure you never get into debt again.
4 Be Open With Lenders
Many lenders say the same thing time and time again – they would far rather you got in touch with them before you began struggling so that they can work with you to come to some repayment arrangements. Before you default or get into arrears, if you’re struggling to meet all your obligations make direct contact with your lenders straight away. Whilst some may be less than sympathetic, others may be willing to accept a lower monthly repayment over a longer period, your mortgage lender might allow you a period of just interest payments, and other lenders may offer you a payment holiday for example.
No, deferring debt is not the ultimate answer and yes, you may end up paying more interest in the long term – so such solutions must be looked at carefully, but if they allow you the breathing space you need to get straight, then such negotiations could be well worth it.
If you are having trouble already and have failed to speak to anyone before the usual default letters start arriving, it is never too late to pick up the phone and speak to a human being! Explain your case, explain that you want to find a way forward, and see how you get on.
5 Do Not Be Afraid
In most countries, owing money on a credit card for example is not a crime. What’s more, just because you’re in debt this doesn’t make you a bad person and give anyone the right to bully you. If you’re faced with faceless yet unpleasant letters from your lenders, don’t worry. They are not personal, they are computer generated, and they are ultimately meaningless in terms of their threats if you don’t allow them to have any emotional impact on you.
It seems bizarre doesn’t it that as soon as someone struggles financially they are immediately attacked. Surely lenders should think about supporting those they lend money to when they struggle. But never mind – just ignore the threats and work to take practical steps to get debt repaid.
6 Don’t Ignore the Problem
Despite us hopefully making it clear that you have nothing to be ashamed of, you must not think that this means you can ignore the letters you get through the post from your lenders! Take each letter as it comes, make sure you’re communicating openly and regularly with those you owe money to. Make sure you keep a constant line of communication open so you can show them how you’re paying back what you can. If you go quiet, your lenders will panic and think you’re defaulting – whereas if you stay visible, don’t hide or ignore the problem, you’ll come out a winner.
7 Make Savings!
As mad as it may sound to you when you’re in debt, you need to look at ways you can save money too. And we don’t mean save into a pot for a holiday abroad some time soon, we mean look at ways you can save money each week and each month, and use the money saved to ramp up the amount you have to pay off your debts with.
Can you switch energy supplier, can you move some of your debt onto a 0% credit card, can you cut back on what you pay out for travel, food, insurances? You may be ready for a financial review with an international financial adviser who knows how the world of expatriates works. Such an adviser can look at both your debts and your outgoings on fiscal essentials - from a pension to health insurance, and maybe see places where you can save money by switching supplier or altering levels of cover.
A financial adviser will be another positive, supportive voice on your side as well, and it never hurts to have support or to have a second opinion about how you’re running your finances. Think about bringing support on board in the form of an IFA who knows about expats and all things offshore, who can look at your debts and your financial requirements, and maybe come up with some sensible suggestions for you.
