Are you caught in a black hole of debt that’s dragging you deeper and deeper into its abyss with no end in sight? If so, you’re not alone: in the United States the average family carries over $15,000 in credit card debt alone. And people in the United Kingdom aren’t fairing much better. According to the Telegraph, families in the UK are burdened by almost £8,000 in total debt, including loans and credit cards.
We’re going to discuss some empowering ways that you can take control of your debt situation and how to go about finding professional debt management.
Advice For Those in Serious Debt
Ignorance begets debt
Professional Debt Management
If you carry more than £1,000 of debt it may make sense to seek out the help of a professional debt management company. These professionals can help you make sense of your complex situation and sometimes consolidate your debt into one monthly payment. However, if your total debt amount exceed £15,000 then an IVA may be much more suited to your circumstances.
One advantage of dealing with debt management professionals is that they have unique relationships with lenders. They can leverage these relationships to decrease interest rates and add more flexibility to your payment schedule. They can also sometimes pause your payments for a while to give you some much-needed breathing room.
In general, most people that try out a debt management company report that the experience was overwhelmingly positive. Having to deal with debt in the thousands on your own or with a spouse can be emotionally and financially difficult.
A debt manager is someone that’s in your corner and will fight to make your life easier.
By completing the enquiry form we can forward your details to a reputable and licensed professional so that you can arrange a free consultation to discuss your options.
You have nothing to lose by getting a second pair of expert eyes to look over your debt situation.
Frequently Asked Questions
- You only have to pay one instalment each month, and the debt management company then distribute that amongst your creditors.
- Sometimes your creditors can agree to temporarily freeze your interest so that the balance you owe doesn’t increase during the term of the debt management plan.
- You only have to pay what you can afford.
- You can have peace of mind knowing that you have a team of fully qualified and specialised debt advisors negotiating with your creditors on your behalf.
The smaller your monthly contributions, the longer it will take to pay off the debt. DMPs are most effective for debt amounts of £12,000 or less. Anything more than that could be better suited in an IVA or bankruptcy order.
As the debt management plan is not a legal contract your creditors aren’t ever asked if they agree.
As individuals typically pay lower amounts than what their creditors are requesting, not making full payments will affect your credit file, however, a debt management plan gives you an opportunity to effectively manage and repay all of your debt, so you can be on the road to repairing your credit score much quicker.
- Personal loans
- Store cards
- Credit cards
You can rely upon a professional debt management company for complete discretion.
Without a debt management plan you are much more likely to be living on a tight budget (if you’re making every payment).
DIY Debt Management
Many people, especially if their debt is less than £7,000, opt to take care of the debt situation themselves. While this isn’t the best idea in all cases, with hard work and excellent organisational skills, you can make it work. Here’s how:
Get Organized: It may be boring and time consuming at first, but proper organisation will save you time and money in the long-run. The first step to getting organised is to get a comprehensive list of your outstanding debts. And the best way to do that is to request a credit report. Many people find that there are debts on the report that they completely forgot about (unfortunately, whoever you owe the debt to certainly hasn’t!).
Once you have that list it’s time to put it into some semblance of importance. Depending on your preferences and debt situation you’ll go about this step differently. Some people put their largest debt right at the top. Others put their smallest. Some put the debt with the largest interest rate as their #1 priority. It’s your debt and your decision about how you want to tackle it.
Start Paying Today: Many people with massive amounts of debt also have thousands of dollars collecting dust in their savings and checking accounts. The interest you receive from bank accounts pale in comparison to the interest you’re paying on your debts. So take any extra money you have and apply it to your debt right away.
Save (and Earn) More: One of the most oft-repeated piece of debt management advice out there is to start saving…and use the savings to pay off what you owe. While this is sage advice, it doesn’t discuss the other end of the equation: making more. If you’re already living frugally, it can be significantly harder to cut costs by 10% than to earn 10% more. Whether you have to take a part-time job or start a side-business online, try to up your earnings as this is the fastest way to pay off your debt.