The best advice when it comes to debt management is to avoid getting debt into the first place, but most people don’t learn the dangers of having a large amount of consumer debt until they’re in debt up to their eye balls. A recent survey showed that the average adult in the United Kingdom has a personal debt of 30,000 GBP or more. With the economic hardship Britain has faced during the last few years, consumers are having an increasingly difficult time dealing with the debts that they have.
If you have issues with debt, don’t panic. You shouldn’t ignore the problem either. If you are struggling with debt it may seems impossible to manage. However, we will offer simple guidelines, following which you should be able to get your life back on track.
• Work out your personal budget, analyzing where your money goes.
• Find out how you can cut out your expenditures. Be realistic.
• Sort out how big is your debt.
• Prioritize any urgent debts (such as utility bills and rent).
• Find out if you can pay your debts off, if so, how much.
• If you are unable to pay your debts off with your current income, find out if you can increase your income.( You may want to think about renting out a spare room in your house or applying for the benefits you`re entitled to)
If you worked out all possible options and are still unable to pay your debts off, you can get free and independent debt advice from organizations like Citizens Advice or National Debtline (the list of those and similar organizations is given in the end of the article). You can get help either online, by telephone or face to face. Trained advisors will discuss your circumstances with you and offer the best solution.
If your IVA debt is between £3,000 and £15,000 you may want to consider Debt Management Plan (also known as DMP) – an agreement between you and your creditor to make monthly payment. It can be managed by yourself or by a third party (DMP `operator`) which can negotiate with your creditors on your behalf. If you have surplus income (£200+ after essential living expenses) you will make one monthly payment, which then will be distributed between your creditors. Most companies will charge for this service, but there are some organizations like National Debtline or Consumer CreditCounseling Service which will do it free of charge.
If you have a debt over £15, 000 you may want to consider Individual Voluntary Agreement. This solution offers you an ability to pay off one portion of your debts and write off the debts you cannot afford to pay. If you go for IVA your interest fees and debts will be frozen.
Options like Administration Orders, Informal Arrangements, Consolidating Debts are also available among others. There are many ways of resolving debt problem and it is often confusing to choose between them. The best way is to use free and independent advice available to you through various organizations all over the UK. Don`t neglect this opportunity and sort out your debt problems now.