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5 Step Debt Checklist: Dealing with Debt Following an Injury

19th April 2010
By Jessica Parker in Personal Injury
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Sometimes, the circumstances surrounding a personal injury can cause people to go into debt when they otherwise would not have done. Dealing with debt can be very difficult but is particularly hard when you have lost the ability to work following an injury.

Where the injury was the fault of someone else, a compensation claim is often the best way to go to secure financial stability for you and your family in the future, but you need to make sure you are comfortable while you wait for compensation to be awarded to you.

What to do if you're in debt because of a personal injury

An injury, illness or accident can affect you in many different ways. As well as the physical and emotional issues to deal with, financial problems can strike as a result of lost earnings, medical costs and any other lifestyle changes your injury has caused.

If your injury was the fault of someone else, and you are claiming compensation because of their negligence, that compensation will eventually help to solve any financial complications you are experiencing.

However, in the meantime, it will be necessary to deal with your debt worries in the best way you can. Here are five simple steps to help you deal with debts while you wait for your personal injury compensation claim to go through.

1. Make a realistic budget for yourself

Often, budgeting can make all the difference to the time it takes to pay off debts. It can help to make a detailed list of every expense you pay out on a daily basis - you might be surprised at where your money is going and you can then cut down on those areas which are unnecessary costs, and seek out better deals on bills where possible.

2. Make a list of your debts in order of priority

With your debts or other expenses, if you are struggling to keep up with payments, you need to make a list where you decide which are your priority debts. For example, failing to pay your mortgage could lead to you becoming homeless, and debts like these with the most serious consequences should be paid off first.

3. Communicate with your creditors

Where you think your payment deadlines might not be met, it is vital to keep in touch with your creditors. Many people make the mistake of ignoring phone calls and hoping the problem will go away. In fact, more reputable lenders will usually try to work with you to decide on a realistic strategy to help you to pay off your debt. But this can only happen if you speak to them!

4. Be very careful of taking on further loans

You might be tempted to take on a new loan to help you pay off your debts - these are often advertised and can seem like a good idea. However, they can end up meaning you pay back far more in the end due to very high interest rates or other terms and conditions. Also, some of these loans are secured against your property, so be aware that if you fail to make payments on such a loan you may lose your home.

5. Seek expert advice

Specialist advice can really help with debt management and agencies such as community legal advice can help you for free. For example, they might be able to advise you on budget management, and help you find out if you can increase your income - for example, if you are eligible for any benefits which you are not currently claiming.
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