In today’s economic climate, it’s not surprising to hear that more and more of us find ourselves in large amounts of debt. With rising prices across groceries and utilities, on top of regular payments on mortgages, cars and other essentials, it’s easy to lose control over your finances. The lack of job opportunities and the startling unemployment figures also suggest that people are struggling to make ends meet.
Searching around the internet for debt solutions will leave you with hundreds of ideas, and probably a headache. The truth is, there are lots of solutions to financial hardship, and there’s also lots of good and bad advice out there.
There are around ten main debt solutions that are popular with those in large amounts of debt. The one you’ll hear most is budgeting – creating a household budget will help manage your finances going forward and also highlight where you could save money to put toward repaying your debt. The monthly excess could form part of a debt management plan, which is another solution available.
You might find you’re in too much debt for simple budgeting, and that a more permanent debt free solution is what you need. These include administration orders, bankruptcy, trust deeds, individual voluntary agreements and debt relief orders, and are all solutions you could consider. These will have an effect on your credit score and your ability to gain credit in the future, so it’s worth weighing up the pros and cons of each one.
Less impactful debt solutions include re-mortgaging and equity release – both free up the value tied up in your home, and can be used towards paying off debts. These have the risk of losing your home, if you can’t keep up repayments.
No matter which solution you choose, you should always research the options in great depth, and seek debt advice where possible, to ensure you make the right choice for your needs.