Take Control Of Your Debt

In the modern era, it is likely that most of us will need to borrow cash at some point in our life. In some cases, the borrowing will be undertaken to make a major purchase, such as buying a car or a house. In other cases, borrowing will be a way of making ends meet at a particular point in time.

Taking out a loan or obtaining finance by itself isn’t a problem, but there is a need to ensure that you stay on top of the finance or you may find yourself dealing with a debt that you cannot control. It can be all too easy to allow debt to spiral out of control so you need to be aware and alert of the difficulties that you may face and of the problems associated with debt.

The most important thing when it comes to debt is ensuring that you don’t bury your head in the sand when it comes to debt. If you are receiving reminders or demands for money, they aren’t going to just go away if you look the other way. There is a need to react to these demands but there is some positive news for people in debt. This is down to the fact that there are ways in which you can get out of debt, even if the current situation looks bleak.

If you need to take out finance, make sure you manage it properly

It needs to be said that the best way to avoid debt problems is to never take out any loans or credit, but of course, this isn’t really an option for most people. You therefore want to keep a close eye on your credit arrangements and to make sure that you are meeting the requirements of these agreements.

There will be a certain amount of money you need to pay off each money for your debts, and this should be the very minimum you pay when it comes to managing your debt. A good way to ensure that you remain on top of these payments is to set up Direct Debit payments that take care of the minimum payments for any loans or credit cards that you have.

If you find that your debt is becoming an issue, you should look to contact the creditors and see if a payment plan can be arranged with them. There is also a lot to be said for calling on the services of debt councillors to create payment plans that take care of your debts and leave you able to move forwards.

You also need to know that there are options available to you when you are in debt. A lot of the pressure, stress and mental strain that people experience when they are in debt is often down to the fact that they feel that they have no options, but this isn’t the case.

Guarantor loans

If you have someone willing to vouch for you to a guarantor loan company, you will find that you are able to obtain a loan at a more affordable rate of APR. This should provide you with the platform to consolidate your debts into one debt, which means that you can make one payment per month. This form of finance is available for people who have a bad credit rating, so if you are looking to improve your finances while dealing with financial issues or problems from the past, a guarantor loan could be a sensible option.

Individual Voluntary Arrangement (IVA)

Another option is to consider an IVA, which is a legally binding agreement which allows you to pay off an agreement amount every month to your creditors. This will usually be undertaken over five or six years and you will also find that you have the option to repay a lump sum. One the IVA has been concluded, any remaining debts that you have will be written off.

With respect to an IVA, you will have to owe a minimum of £15,000 to at least three creditors and the companies that you owe money need to come together to provide 75% agreement to your IVA.

There is also an option to declare bankruptcy but this should be considered as a last resort as it will involve your home and other remaining assets being sold off to repay the money that you owe. It is possible to apply for bankruptcy under your own accord it can be enforced upon you by your creditors. Bankruptcy lasts for one year but it will remain on your credit file for 6 years, and this can seriously impact on any future credit applications you make in this time period.

Andrew Reilly is a freelance writer with a focus on news stories and consumer interest articles. He has been writing professionally for 9 years but has been writing for as long as he can care to remember. When Andrew isn’t sat behind a laptop or researching a story, he will be found watching a gig or a game of football.