The Five-Step Plan to Clear Debts
Follow this five-step plan from the dedicated financial advisors at Debtsolver and make 2010 the year you free yourself from debt.
1. First of all, you must face up to your debts. All of them. Take stock of everything that you owe and be totally honest with yourself about the level of debt that you’re facing. This means making a list of all of your debts, from your mortgage and bank overdraft, to your personal loans, store cards and credit cards. The first step towards solving your debt problem is confronting it and getting help and advice from a specialist.
2. Target the debts with the highest rate of interest and concentrate on paying these off first. It’s these debts that are costing you the most so deal with them as soon as possible. More often than not, these will be store cards or credit cards. You can tackle this by transferring the balance to another card with a better rate of interest and is offering 0% balance transfers. Read the small print on these arrangements carefully though as the advertised rate may not be what it seems. Again, talk to a debt advisor from Debtsolver about the solutions that best suit your financial circumstances.
3. The same principle applies to all of your debt. You want to tackle the most expensive forms of credit first and reorganise them to take advantage of cheaper finance streams. That is, you may find that the credit costs you less if you look elsewhere. Instead of a range of credit and store cards, you may find that a debt consolidation loan saves you money and helps you to manage your finances more easily. Again, everyone faces different financial pressures so talk to a specialist debt advisor.
4. When you were taking stock of all of your debt, it was no-doubt tempting to overlook your mortgage. Big mistake. It might not feel like your other debts but chances are that it’s the biggest single debt that you currently face. In addition to that though, it’s a debt that needs to be serviced in order to keep the roof over your head. As a means of consolidating your debt, you may find that re-mortgaging your home and using it to secure your debts can offer you a reduced rate of interest. This is because it serves as collateral and lessens the risk to the lender. It can put your home at risk of repossession though, so talk through your options and get advice on the implications.
5. Once you’ve got a clear idea of your financial situation and you’ve started to isolate those areas of high cost debt that need to be tackled first, you’re on the right track to freedom from bad debt. This is just the beginning though. Deciding on the best debt solution to suit your financial circumstances can be difficult. After all, there are a number of options on the market. Whether your best and fastest route to debt freedom is a Debt Consolidation Loan, an Individual Voluntary Arrangement, filing for Bankruptcy or straightforward Debt Management, a specialist debt advisor will be able to explain these procedures and help you settle on the best one for you.
If you would like more information, ring Debtsolver now on 08000 434 336 or fill out our quick, free and easy debt wizard at Debtsolver.co.uk
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