Home Personal Finance Take action to get out of debt

Take action to get out of debt

by Dave

The problem many people have with debt is that they are unwilling to acknowledge or accept that they have let their debts get beyond their control. However, as soon as you start to work at clearing the debt, you will see that the stress and anxiety caused by having debts hanging over you begins to lift.

What you need to get out of debt is a plan of action, and this can be difficult to formulate on your own. Luckily, for those who are looking for help with debt UK debt management companies are in plentiful supply. There are also some debt charities that offer the same kind of services and advice.

Most people who contact a debt management company will be given the option of setting up a debt management plan. This is where you get to log all your expenditure and income, and work out with the debt management consultant what kind of monthly budget you should be able to manage on. Any surplus income can then be used to begin to pay off debts.

With a debt management plan, you pay one monthly payment to the debt management company which then redistributes that amongst the creditors you owe. This simplifies the admin of having debts, and it also relieves some of the pressure as the creditors will no longer chase you directly. The debt management company may also be able to negotiate interest freezes with your creditors.

If you have a large amount of unsecured debts, then debt consolidation might be another solution. This is where you take out a larger loan to pay off all your existing debts. Usually, debt consolidation loans have lower interest rates than credit cards and store cards, and you will have the simplicity of having one loan to clear rather than many. However, you need to be self-disciplined to avoid the temptation of spending on cleared credit cards again until the debt consolidation loan is paid off.

For people with greater amounts of debt, over £10,000 for example, then an Individual Voluntary Arrangement or IVA may be required. However, there are long-lasting consequences to entering an IVA so you should do your research before deciding to take this solution.

There are many options for people facing up to debt; the important things is that you make sure you choose the option that is most suitable for your own circumstances.

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