Debt

Top Tips on How to Get Out of Debt

People can get into debt for all sorts of reasons, such as failure to make credit card repayments, going deep into the red with unscrupulous payday loan companies or by simply not having enough money to pay household bills. Whatever your debt problems, there are solutions out there that can help you back on your feet and make your financial worries a thing of the past.

Money search

It’s easy to sink into a depression when in debt, and even easier to stay up all night worrying about how you’re going to pay the money back to your lender. However, there are effective solutions out there that can give you back your peace of mind, and you’ll be able to pay back your debts at a rate you can afford.

We know a lot about the financial sector so you can trust in our debt management advice. We know the difference between an IVA and bankruptcy, and can point you in the right direction to ensure you opt for the best solution for your needs. So, you’ve heard what we have to say, now let’s take a look at the options available.

Consolidation Loans

Consolidation loans are a superb way to remove your debt and the high interest rates that come with them, as you’ll simply be paying off multiple monthly debts for one affordable monthly amount to one lender. However, qualification for a loan will ultimately depend on your individual circumstances, how much you wish to borrow and the length period of the loan. For example, you may be more likely to secure a loan if you own your home, as you can use the property as collateral.

A Debt Management Plan

Don’t struggle in silence. It’s so easy to act as if those bills aren’t coming in, in the meantime allowing them to build up gradually. Nip it in the bud while you can and consider a debt management plan. You don’t have to worry about contacting your lenders, either, as a debt management company will discuss the plan on your behalf, and you’ll then only have to pay one monthly payment that suits your lifestyle, so you don’t have to pay back more than you can afford.

An IVA

If you have £12,000 or more of unsecured debts then an Individual Voluntary Agreement (IVA) might be the best option for your needs. This is a legal arrangement between you and your lender to remove your unsecured debts over a fixed period. What’s helpful about an IVA is that you don’t have to pay back a penny more once the fixed timescale is up, so you pay less than you owe. You can also rest assured that your debts won’t be subject to interest or charges, as the lenders will be required by law to freeze them. While an IVA will last for 5 years, it’s a great solution to become debt free in the future.

Trust Deeds

If you’re a Scottish resident that you should definitely look into trust deeds, as it offers a binding agreement that could see you debt free within 36 months. If you opt for a trust deed then you’ll repay your debts in part or full; however, like any other debt management solution, a trust deed may affect your credit rating and could remain on your file for up to 6 years.

Bankruptcy

If you’re considering bankruptcy then the chances are you’ve browsed every other avenue available. It should always be undertaken as a last resort, as this process will share all your assets equally between your lenders and it could seriously impact your credit rating. However, it will clear 100% of your debts so you can start fresh and live a debt free lifestyle again.

For the best debt management advice, contact the Citizen Advice Bureau or speak to a friendly, helpful member of staff at Churchwood Finance who can identify the best debt solution for your needs.

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