More than half the population across the globe is struggling with financial issues that keep piling up leaving the borrowers with no option but to keep repaying for months and years. The debt treadmill is one on those financial hardships on which no one would want to run, but circumstances could bring you down to such situations. However, life does not stop there, and you could get out of debts through different debt help solutions. In the UK, the government has come up with a couple of debt management plans using which you can get out of debt in a manageable way. Even though the debt help solutions are to help you overcome your debts, there are a few pointers that you need to consider before availing them. Here is what you should be answering for yourself before getting debt help.
1. How Much Debt Do You Owe?
Any work, especially when it comes to finance-related stuff, needs to be assessed well before taking any step ahead. And when it comes to availing debt management plans, the starting point is at evaluating and analyzing your entire situation. You need to have a clear idea of how much debt you owe to your creditors, your minimum monthly repayments, your income, etc. Taking stock of your financial situation will give you a better idea of the entire scenario, and it could help you get out of debt in a much convenient way.
2. How Many Debts Can You Afford To Pay?
Your amount of debts and your income are the criteria that help you figure out if you can repay your debts in a manageable way. By creating a budget, you will have a better idea of how much money is coming in, how much money is going out, and where it is going. With this, you will have a better picture of your finances, giving you more clarity on how many debts you can repay, and how lessening your expenses can reduce your debts.
3. What Are My Debt Management Plans?
If you feel that your current financial situation does not let you repay your debts to your creditors, you can consider availing debt help. In the UK, there are many debt management solutions, availing which you can write off your debts in a better way. It is essential to note that different places in the UK have different debt management services, and they come with different rules & policies.
The debt reduction plans in England, Wales, and Northern Ireland include - IVA; DRO; DMP; County Court Administration Order; Debt Consolidation; Bankruptcy, etc., whereas those of Scotland include - DAS; PTD; MAP, and Sequestration.
So, you could study your debts, income, and your overall financial situation, and decide for yourself if you can resolve your debt issues with some extra refinancing in the form of debt consolidation loans, or if you need to avail any debt help solution.