If you need bad debt relief, there are a number of options that you can consider. The first is a debt consolidation loan, which is a loan that encompasses all the debts that you owe and so enables you to pay off your creditors and make the repayments at a lower rate of interest. This is a good option if you have a good credit rating, because otherwise you are unlikely to get competitive interest rates. If you are looking to buy a property or have a property in which you have equity available, you may wish to consider using a mortgage or remortgage for bad debt relief.

If you were buying a house, you would apply for it in the normal way. However, you would simply borrow a little more than you needed for the actual property, and could use the remainder of the money to pay off your debts. Likewise, if you own a property, you could remortgage to release the equity that has built up over time and use the funds for bad debt relief. As a mortgage is such a long-term contract, the interest rate that you would receive is likely to be considerably better than that which your other creditors are offering. However, as you are taking out a loan against your property, you should carefully consider this bad debt relief option before proceeding. If you fail to keep up repayments on the mortgage or remortgage you could be in danger of losing your house. We would advise speaking to a bad debt relief specialist before proceeding, so that you are able to talk through your options.

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