Debt Management

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Do you feel your debt is becoming a problem for you?

Tips and Advice for Getting Out of Debt

Debt is a part of life in modern society, and almost every adult in Britain has some form of debt to repay. However, for some consumers it becomes a serious problem when mounting debts begin to exceed income and they struggle or fail to keep up with repayments. Here are some tips and advice on how to get out of debt.

Getting out of debt is not easy and it takes positive action and good planning to do it effectively. There are a number of steps that need to be taken:

  • Identify and prioritise and your debts
  • Prepare a budget and stick to it
  • Deal with debt
  • Keep up with repayments

 

 

 

Identify and prioritise and your debts

You may have been putting it off for a long time, but the first step is to list all of your debts and make a note of details. How much do you owe? Who do you owe? When is payment due? The next step is to prioritise these debts. Identify the debts that need immediate attention and the ones that you simply have to pay (e.g. mortgage, utilities, debts where legal action has taken place or is pending).

If you are in arrears and/or struggling to keep up payments on any of these debts you should contact the lender immediately, by letter is best. This may be daunting, but any lender will be happy to receive communication and some may be surprisingly helpful by offering reduced repayments over a longer term or some other solution.

Dealing with these priority debts should take a lot of the pressure off. So then turn your attention to secondary debts – money that has been loaned to you without providing any security. These include bank overdraft, credit card debt and debts to family and friends.

Now that you have listed and prioritised your debts, you will need to move onto the second step – preparing a budget.

Prepare a budget

Put simply, a budget is a list of money you receive and how you intend to spend it. A good personal budget is essential for financial wellbeing and is a key tool in the prevention and cure of personal debt problems.Begin by calculating your weekly or monthly income, then work out your spending and finally calculate how much you can afford to spend on repaying your debts. The best way to do this is to draw up a budget sheet where all incomings and details are set down in detail.