The first step towards freedom from debt and avoiding severe debt solutions like personal insolvency is facing up to the problem. Next, you’ll need to look carefully at your budget and cut out unnecessary spending. This will let you pay more money towards your debt repayment. After you’ve tightened up your budget and have an idea of what you owe and what you can afford to pay, seek out professional debt advice. Debtsolver can help you to find the right debt solution to suit your circumstances and if necessary, assign you a licensed insolvency practitioner.

A licensed insolvency practitioner (IP) is the only person who is qualified to act in relation to insolvent individuals, partnerships or companies. They’re also obliged to have professional indemnity insurance in addition to case-specific coverage. The Institute of Chartered Accountants are just one of the regulatory bodies who oversee the conduct of IPs. Like going to the doctor, there really is no case that they won’t have come across before so there is absolutely no need to be embarrassed. Don’t put it off and don’t hold anything back. With swift action and full disclosure, the insolvency practitioner will be able to help you find a reasonable, manageable solution to your debt problem.

Make a detailed account of your financial situation, including a complete breakdown of your incomings and outgoings, assets and liabilities. This is integral in helping the insolvency practitioner to guide you through your options. Each will have benefits and drawbacks that you’ll need to discuss in order to come to a decision on which will be best for you. If you have a limited income and no assets, it’ll probably be bankruptcy.

The right debt solution for you will depend on your financial circumstances. If you are looking to avoid bankruptcy, an insolvency practitioner might suggest an Individual Voluntary Arrangement. This is a legally binding arrangement with your creditors, which is brokered by an insolvency practitioner. A proposal based on your debt and ability to make payments is put to your creditors and if they agree to it, your IP will oversee repayment of your debt, so you won’t have to deal with your creditors any more.

IVAs have their benefits for all parties. Your creditors will tend to be repaid a greater proportion of the outstanding debt that they would have been if you had filed for bankruptcy. If you are a homeowner, the chances are that your property will be safe, although you may have to relinquish some of the equity towards repayment.

Of course, as everyone’s situation is different, you could find that an IVA isn’t right for you. For some people, filing for bankruptcy can be a more favourable solution to their debt problem. This will involve filing a petition at your local county court. The bankruptcy term usually lasts for a year but again, depending on your financial circumstances, this can fluctuate. When you have successfully completed the process and are discharged from the bankruptcy, you’ll be free from debt and ready for a fresh start.

You’ll be assigned a trustee by the court and they’ll deal with your creditors on your behalf. This includes dealing with your assets. More often than not, your main asset will be your home. Bankruptcy will not necessarily mean you lose your home; it depends on the value, the mortgage and your financial circumstances.

The Debt Relief Order is intended for those facing debt problems without many significant assets. That is, for those who don’t own their home or have the material resources to supplement their earnings. In order to qualify for a Debt Relief Order, an individual must have a total combined debt amounting to less than £15,000. For those that match these criteria, the DRO could be an ideal solution; potentially freeing you from debt within a year and allowing you to avoid the more severe debt solutions on the market, like IVAs and bankruptcy.

The extent of your debt problem is not dependent on the amount that you owe. It’s a question of your ability to service the debt and maintain the repayments. The Debt Relief Order, as we’ve said, is pitched at those who aren’t homeowners. However, it’s also a debt solution that could provide the most manageable route out of debt for anyone who finds that they have under £50 left after paying their monthly bills. Your debts, which must amount to less than £15,000, can include any unsecured loans, credit card debt and your overdraft facility. Excluding you car, which can be worth up to £1000 but including your pension, your assets can’t be worth more than £300 in total.

The DRO term is usually a year and in that time your creditors will not be able to chase you for any payment or take any further legal action against you. However, you’re going to find it very difficult to obtain any credit. Considering your situation, this may be a good thing but if you do apply for any credit of over £500, you are legally bound to inform them of your DRO. It remains on your credit report for 6 years after successful completion of the terms.

Debt Relief Orders must be granted by the Official Receiver and if you come into some money while you’re under the terms of the DRO, you are obliged to let them know. If you break this or any other rules of your DRO, the Official Receiver will implement a Debt Relief Restriction Order, extending the restriction period to 15 years.

A Debt Relief Order can only be issued to individuals in debt who have been referred by an authority that is recognised and approved by the Insolvency Service. Debtsolver will be able to give you more information about the organisations that are authorised to make Debt Relief Order referrals; there are six of them. Providing it’s the right debt solution for you, your dedicated debt advisor will take you through all stages of the process and help you to complete the necessary paperwork for the Official Receiver. This is after you have talked to them about your situation and come to a decision on which solution is best for someone in your financial circumstances.

The benefits system in the UK is build on noble principles. It provides a valuable safety net for those who find themselves in fiscal dire straits. The recent economic crisis has shown us that anyone can be affected by a sudden change in financial circumstances. In particular, loss of employment is a common cause of this extremely difficult situation and will often result in an inability to meet debt repayments. Of course, in addition to the benefits system, help and advice from companies like Debtsolver can help you to solve the debt problem and see out the period of unemployment.

However, there are those that exploit the benefit system and perpetuate our national debt problems, rather than making an effort to solve them. The lengths that some people will go to in order to avoid working are staggering, as is the cost to the British taxpayer. That puts more pressure on all of our finances. Here is a top ten of some of the most scandalous abuses of the British benefits system and an estimation of how much they cost (according to comparison site TotallyMoney.com).

1. Almost half of the residents of Falinge, in Rochdale, are currently claiming incapacity benefit. Across the country, over two and a half million are doing the same. That’s nearly 5% of the UK population and it costs the UK taxpayer over £40k a week.
2. Islamic cleric received more than £1million worth of legal aid, while claiming £680 each week in state benefits. Although he actually owned another property that generated £130,000 in profit, he lived in a £550,000 council house.
3. Having raised all 13 of her children on benefits, the thought of having to find work, now that some are leaving home, did not appeal to one woman. She’s currently estimated to be “earning” over £27,000 in benefits, which is comparable to a salary of £37,500.
4. A family of 4 with a combined weight in excess of 80 stone have maintained that they are too big to work. That means an estimated £22,000 a year in benefits. One daughter claimed, “It’s not our fault we can’t work… no one wants to employ fat people.”  She turned down a job offer on live radio a month later.
5. A couple invented 16 children to fraudulently claim more than £75,000 over four years. However, despite being imprisoned for fraud, it was claimed that this was, in fact, a public service; exposing loopholes in the benefits system.
6. An 18 year old, who left her parents’ £1million home at 14 to have a baby, has recently given birth to twins –to a different father. She is now claiming that her £16,000 a year in benefits is not a sufficient sum to live on; despite the median salary in the UK being roughly £20,000.
7. A 29-stone mum on benefits is too busy to feed her 8 month old triplets healthy food. Existing on nearly double their recommended calorie intake, the children are only allowed vegetables once a week.
8. The strongest man in Cornwall in 2007 took home the title and £300.  However, he was also taking home £40,000 in disability payments at the time and holding down a job. Naturally, he didn’t inform the authorities because it would’ve cost him his housing and council tax benefits.
9. A couple claimed £40,000 worth of benefits while they sailed around the world in a luxury yacht. While too sick to work they enjoyed scuba diving in Kenya and swimming with dolphins in the Canary Islands.
10. While seeking asylum in the UK, Iranian national Massoud Montazery claimed £25,000 in benefits. However, he also had over half a million pounds in a secret bank account, drove a Merc and dressed designer.

There seems to be some kind of unspoken connection between fitness and finance in the UK. On one hand, the stress of debt can manifest itself physically and comfort eating can often be a coping mechanism for financial worries. On the other hand, our desire to drop a few pounds can lead us to spend far too many. So, the stress of debt can have you piling on the pounds and hitting the gym can have you spending them. If your debts are building up, talk to an advisor at Debtsolver rather than turning to the biscuit box.

Regardless of what the gym membership adverts would have you believe, getting in shape needn’t actually cost anything. It’s great for your mental as well as physical health. The stigma of bad debt can have a profound effect on your self esteem and a few sit-ups, press-ups and squats can really make you feel better. Exercising releases endorphins, the naturally occurring chemical that makes us feel good. Much like dealing with debt though, taking the first step towards a happier, healthier routine can be difficult.

The idea of pounding the pavement might not be appealing but it’s a great way to get fit and it doesn’t cost anything. Of course, if running really isn’t your thing, you could always try cycling. Don’t let the thought of buying a bike put you off; it can be done cheaply and easily through the Government’s Cycle to Work scheme. This programme will allow you to pay off your brand new bike from your pre-tax salary. You just have to use it for your commute, which means that you’ll be getting in shape wile you cut out your travel costs.

Although we would recommend that you take full advantage of any free ways of getting fit first, you may feel that a gym membership is an affordable addition to your monthly budget. Any such expenditure should be carefully planned and you should only enter into it if it’s reasonable. If you can afford it and you’re sure you’ll make the most of a gym membership, shop around first. Your local council will often offer excellent facilities at a fraction of health club rates.

If the facilities are poor and you can find a good deal, consider joining a private gym. As you should with any contract, be sure to read the small print thoroughly before you sign up to a gym membership. You should have shopped around and examined all of the facilities at your disposal. Once you’ve found the gym you like, at a rate you like, be sure to get some free tours and make them woo you. After all, they’re trying to sell you a membership so make them work for it. If that means haggling for a reduced joining fee or even waiving the joining fee, then it’s worthwhile.

Consider how it will be to live with the membership too. You may be in awe of the fabulous facilities but if the gym’s not convenient enough, you’ll not go as often as you want, or as often as you’re paying for. If you don’t go, you’ll need to know if there’s a cancellation fee and before you sign up, find out if there’s a minimum contract term.

It’s always a good idea to stay fit and healthy but you should always look to shed those extra pounds while spending as few as possible.

As we know, a sudden change in your financial situation is one of the most common causes of debt problems. As a result of the credit crunch and recession, unemployment figures have risen and losing your job without warning can have a severe impact on your circumstances. If you are already overstretching your budget, losing your source of income can bring on bad debt very quickly.

Unemployment isn’t the only thing that can suddenly change your financial circumstances. When it comes to putting increased strain on your budget, nothing really compares to having a baby. The little bundle of joy will, of course, cost you money. It’s not just the added expense though; raising a child will naturally reduce the time you have to work, impacting on your earning power. With the ever increasing cost of child care, rushing back to work may not always make financial sense. Essentially, as with any other financial difficulty of debt solution, it depends on your situation.

Here are some tips from the Debtsolver team that will help you with your baby budget.

As ever, when it comes to being thrifty your two best friends are reuse and recycle. So, if any of your friends have baby stuff to pass on, take advantage. Things like baby monitors, cots, baskets, slings, car seats and any good-quality, hand-me-down baby clothes are great. Similarly, if your friends have skills that can you can take advantage of. After all, what’re friends for? Also, when it comes to child care, how about granny and granddad?

If you’re at home, use the time in to have a bit of a clear out and take what you can to the car boot sale. Have a regular clear-out and take any unwanted stuff to a car-boot sale. Complete online surveys that offer incentives like vouchers, discounts and chances to win prizes. Think of as many other ways that you can earn around your baby’s schedule too. How are your arts and crafts? Can you bake or knit? Are you good with a computer? Basically, think of the ways you can use your skills to bring in a bit of extra cash.

Cut down on your wastage by planning your weekly shop and cooking with fresh, local produce. You could even plant your own vegetables in the garden. Don’t be afraid to stretch out any leftovers the next day. Making soup can be a great way to use up any excess veg too.

This all sounds great for everyday but what about marking special occasions on a tight baby budget? Well, there are just so many occasions in your baby’s first few years, all of which you’ll want to mark with something special, that it can be a real concern financially. Putting these things on your credit card can be tempting but it’s just a way to build up debt that the whole family will feel the effect of in the future. To keep costs down; throw a garden party if the weather’s nice, encourage friends and family to bring some food for a picnic and play some party games.

Above all else, dealing with your debt while bringing up baby relies on how well you manage your money. Luckily, there’s support out there to help you manage your debt while you’re on a baby budget.