Whilst most of us would love to be free of debt many of us have had little choice but to borrow money for various things other than our mortgages. Credit cards, loans, store cards, overdrafts, and catalogues have all become a part of life for most people, and many people get themselves into a spiralling level of debt getting to the point where they can barely manage to keep up with their repayments.
Getting into debt is unavoidable for most of us. However, it is possible for those that are struggling with their debts to take action to try and ease the situation. The measures and options that are available to you will depend on a number of things, such as your personal situation and circumstances to the level and type of debt that you have. It is a good idea to look at the various options that are open to you, as some resolutions will work more effectively than others.
Action that you can take
Over recent years, many people may have found themselves deeper and deeper in debt, with financial problems having affected their finances to the point where they have been living on credit. These are issues that we hear all too often on channels such as CNN News Live. Being in debt so deeply can really drag you down and affect your health, and this is why it is so vital to take action as early as possible in order to get things sorted out with your finances and ease the stress that debt can cause. Some of the many solutions available are outlined below:
- Consolidation: Consolidating your debts can prove to be one effective option for those that want to try and reduce their monthly repayments and make their debts more manageable. This is an effective solution for those that have a range of different unsecured debts such as credit cards, loans, overdrafts, etc. In order to get a good rate on a debt consolidation loan you will need to have a pretty good credit rating, but if you are able to get this type of loan you can wrap up all of your other debts into one, cut the number of creditors that you are dealing with, and reduce the amount that you are paying out each month.
- Debt management plans: If you are in a situation where your debt repayments are taking up a large chunk of your income, leaving you short of money for other essential payments, it is worth considering a debt management plan. There are various debt charities and agencies that can help to set these up, and you should find one that does not charge a fee. Under a debt management plan you could reduce the amount that you are paying to each creditor by a significant amount and simply pay over a longer term until it is paid off. The interest on your debts is often frozen under these plans, and you usually make one payment to the debt management company which will then distribute the payments to your creditors.
- Bankruptcy: If you are really struggling with your debts and you have over a certain amount in unsecured debts, you may be eligible for bankruptcy. This is not something that should be taken lightly to escape debt. However, for some people that have no other option it can be an effective solution.
These are some of the key solutions to consider if you want to take control of your debts in 2018.