Money worries will usually strike the majority of the population at some time or other throughout their lifetime, but its more to do with how you handle these challenges and face up to them, more than the worries themselves.
Although most people will have some kind of debt, whether it’s a mortgage, loan or credit card, as long as you can manage this debt and deal with it efficiently, you are normally ok. There are occasions where this debt can spiral out of control, maybe due to a redundancy or ill health, but there are things that you can do to try and tackle this problem and deal with the money issues, we take a look at some of these below.
These are our top tips when it comes to clearing your debt and avoiding ultimate bankruptcy.
Set Out A Plan For Managing Debt – A debt management plan is something you can draw up yourself or with the help of an organisation like the CAB (Citizens Advice Bureau). You should write a complete list of all your debts, interest being paid and your outgoings and then a list of your incomings. Set over a period of time you should try to focus on repaying the debts the best you can and work out areas you can save your money, for example on shopping or leisure activities to make sure you can make an indent into your debt worries.
Take A Second Job – Sometimes the obvious can be staring you in the face, especially if you have a qualification or a skill. You can look at taking on part time work and the few odd jobs outside of your normal hours, but you will need to check with your local tax office to make sure that you will not end up paying far more tax and therefore making the extra working unbeneficial.
Consolidate Your Loans – Some experts may seem quite sceptical when it comes to consolidation loan firms offering to help you sort your debt out. Often, they may have cause to be concerned but in some circumstances this type of lending can be the best alternative for the person concerned, especially if they have used up many other alternatives. Just like any loan, you will end up paying far more than the original debt, but if it helps to remove the immediate pressure form your shoulders then it should be worth a look. Just make sure you do research into the company you are looking to use and get as many quotes from as many different consolidation companies as possible.
Sell Your Home – Sometimes seen as a drastic solution, it can also be one of the most sensible alternatives if you are facing bankruptcy. If you purchased your home a few years ago then you will probably have some equity in your home, which means you could look at repaying some debts and then downgrading your property to something cheaper or even renting. You may want to make use of an equity fast company that will buy your house for cash, meaning you are not waiting months for a sale whilst your debts are creeping out of control.
IVA (Individual Voluntary Arrangement) – One of the final procedures that you will need to look at before you face bankruptcy is an Individiual Voluntary Arrangement, or an IVA for short. This is where a contract is drawn up between you and your creditors and can be flexible when it comes to your needs. The contract is binding and is controlled and issued under the Insolvency Act of 1986 and really is the final step before you face bankruptcy, so can be worth looking at if all of the other options have failed.