There are a few guidelines to follow that may be useful to those who are in debt. Following these rules should make it easier to reduce debt and needless spending.
Borrowing more money might not be the solution.
Rethink your decision if you want to borrow money to pay off debt. Be wary of any secured loans against your property when trying to consolidate existing debts. Consolidating debts means you borrow a large amount of money to repay existing debts. This amount is repaid over a longer period and might mean you pay more interest – and complicate your finances, too. You could lose your property if you do not keep up with the repayments on the secured loan.
Ignoring the debt won’t cause it to disappear.
Do not think debt will go away on its own. It will only get worse the longer you leave it. Write to your creditors and explain to them that you need help. Send them a detailed personal budget that shows your expenses as well as your monthly income. This budget should also tell them how much you can afford to pay them every month.
Devise your own strategy.
Someone else might want to pay off the higher, interest-bearing accounts; you may prefer paying off the smaller bills first. Do what works for you. But make sure that the priority debts such as your mortgage or rent, loans secured on your home, council tax and utilities are paid before the unsecured debts.
Maximise your income.
Are you claiming enough Tax Credits? People on lower incomes may qualify for a rebate on rent and council tax. Independent welfare rights agencies could give you more information on benefits that are due to you. Payment protection insurance might cover those who have lost their job or are off sick because of sickness. Are there any adults in your household who are not contributing towards the bills? The Inland Revenue can tell you whether your tax code fits your circumstances. Switch to better deals on goods and services – this could save you plenty of money.
Independent advice services may help you control your finances.
These debt management plans are available to anyone and they could help you to get out of debt. Phone Harrington Brooks and speak to one of the consultants.