Britons carry some of the highest levels of personal debt in the developed world. In the immediate aftermath of the global financial crisis of 2008, we began to take charge of our finances and were paying down our debts at a remarkable rate for several years. Recently, however, we have started to accumulate credit card and other debts, most notably in the form of unsecured bank and payday loans. Economists note that the United Kingdom’s recovery has largely been driven by debt-backed consumer spending. This pattern is certain to gain momentum over the Christmas period, when most of us spend more than we can afford on gifts and festive fare. Indeed, a recent report commissioned by Groupon suggests that we spend twice as much per head as our French neighbours, and they are the second biggest seasonal spenders. This can lead to a miserable, worried start to the New Year for many of us. Fortunately, there are some excellent resources now available to help you navigate your way through difficult times. Whether you just need a minor financial tune-up or a more substantial overhaul, help is at hand.

Honesty: the best policy

The most important project for the New Year is to spend time establishing exactly how much you owe, both in total and in terms of weekly or monthly payments. This should include every liability, from your mortgage to money you owe friends or family. This can be a difficult and distressing process, but it is necessary and you can be confident and proud that you are taking the first step towards a brighter financial future. Once you have calculated your total debts, you need to set out your other outgoings such as food, clothing, transport and utilities, making sure you are as realistic as possible. The final step is to subtract all of this from your income and work out exactly how much of your earnings are used to service debts and whether this is sustainable. Are debts compromising your life? For example, are you left with enough to buy all the food and heating you need? The answer to this will help you to determine the path you need to take.

My debts are manageable but I would like to tighten my belt a little

In this situation, you have a number of options at your disposal. It is always worth checking one of the online comparison services to ensure that you are getting the lowest possible interest rates for credit cards and other financing and whether transferring to another provider will be beneficial. It can be equally profitable to check whether you can reduce utility bills by moving suppliers. There are now some useful websites and smartphone/tablet apps that can help you find the cheapest supermarket deals each week.

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Assessing areas where you can make savings isn’t always easy, but many banks now have online services that calculate the proportion of your income used on food, bills, entertainment and other expenses. This can help you identify at a glance those areas where you might be overspending or where you can look for savings. The Money Advice Service is an impartial resource set up by the government. It offers a quick and simple budget planner that can really help you organise your finances.

My debts are starting to overwhelm me

The most important thing is not to panic; non-judgemental professional help is available. Since the financial crisis, millions of people have been in this position and debt experts understand the pressures that can contribute to a debt crisis. They will never criticise you or the decisions you have made and will offer practical advice on how best to move forward.

Another other hugely important point is not to ignore your financial problems. They will not go away, and they could grow much worse if they are neglected. Reputable creditors realise that customers occasionally run into difficulties and will be much more sympathetic and inclined to help if you answer their calls and letters. If you explain your situation and tell them that you will get back to them after taking advice, they will normally give you some breathing space. The vast majority of lenders are regulated. If a creditor is over-aggressive or threatening, you can usually gain redress from the Financial Conduct Authority or Office of Fair Trading, although this depends on the lender and circumstances.

Finally, don’t be rushed into a quick decision; there might be better options open to you. A quick glance at the internet will show you that there are thousands of companies vying to lend you more money or offer other debt solutions. Sadly, not all of these companies are entirely ethical. A good starting point is to consult the Money Advice Service mentioned above for explanations of the different routes you can take to get out of debt. They have simple, comprehensive guides to:

– Debt management plans
– Administration orders
– Debt relief orders
– Bankruptcy
– Debt restructuring
– Individual Voluntary Arrangement

The Citizens Advice Bureau and debt charities such as Stepchange also employ experienced advisers who will offer free, unbiased advice on these options so that you can make informed decisions.

At this point, you will probably approach a commercial debt solution company such as https://www.carringtondean.com/ for specifics of their services. An adviser at this type of business will take time to learn about you and your finances and will only then suggest a debt product. For example, if they feel that an Individual Voluntary Arrangement or IVA will best accommodate your requirements, they will explain this and its implications (such as its impact on credit ratings) so you can make your final decision. They will then begin the process of freeing you from your debt burden.

January 2016 can be the start of a brighter financial future regardless of your circumstances. It won’t be easy, but it will ultimately be worthwhile for you and your family. Good luck!