We all know how stressful it can become when you are in a lot of debt. First, you will receive reminder letters from the companies concerned. If you fail to pay the money you owe, the case will then get sold to a collector. When you start to receive letters from debt collection agencies, the strain increases tenfold. All that red writing can make you feel like a criminal, but don’t worry too much because help is at hand. Debt collectors will use every trick in the book to get you to cough up. However, their most frequently used technique involves hounding you for the money. Many people receive multiple phone calls every single day.
If you are in a dire financial situation, now is the best time to look for ways you can improve it. Hoping that your debts will simply drift away is not a good plan. With the advice and guidance listed below, you should be in the best position to reduce your debt and get your finances in order this year. At the end of the day, it’s only money, and you should not let things like that get you down. So long as you work hard and research all the options on the table, you should find the perfect solution soon.
Throw your credit cards away
Credit cards are useful for people who need to make substantial purchases but don’t have enough cash on hand. However, failing to clear the balance every month will mean you are exposed to high rates of interest. If you are in debt, using credit cards is never going to be a good idea. You need to start reducing the amount you owe as soon as possible, and that means refraining from borrowing more money. Cut your credit cards up right now, and you will be on the road to success. Just don’t forget to keep paying the monthly statements, even if you can only afford to make the minimum payment.
Reduce your monthly bills
You’re going to need some extra cash in order to reduce your debts. So, it makes sense that you should limit your monthly spending. Try avoiding designer clothing stores and purchasing anything you need from cheap outlets and supermarkets. To reduce your monthly food bill, it’s wise to plan your meals in advance. That way, you can be sure that you only purchase the products you need. Shop owners spend a lot of money on getting psychological advice designed to make you spend more when you visit their premises. Don’t fall for their tactics. Impulse buys are not essential, and you should avoid them.
Get an IVA
Some people struggle to keep up with their financial obligations because they owe money to lots of different creditors. It can be difficult to make sure all your payments are made on time without a reminder system. If you live in England, Wales or Northern Ireland, you could save yourself a lot of hassle by applying for an IVA. They work by grouping all your debt together and allowing you to make one affordable monthly payment. Your creditors are no longer allowed to contact you directly, and so the stress you have been under should disappear. Just be warned that people who fail to pay their money on time under an IVA will not get a second chance. There are plenty of websites you can use to find out whether or not you might qualify for such an arrangement. Start your research today! It could be the best thing you ever do.
Contact a financial adviser
Presuming you just need to create a system that allows you to pay all your creditors on time, it might be worth employing the services of a financial planner. While you will still have control of your bank accounts, they will design a program that will ensure you never receive a late payment fee again. You simply have to let them know how much you earn, how much you spend, and how much you owe. They will then work hard to make sure you have enough cash to keep everyone happy. If the adviser discovers that you are incapable of meeting the repayment schedules, you should look at one of the other more serious solutions mentioned on this page.
Declare yourself bankrupt
Bankruptcy should always be a last resort for a number of reasons. Firstly, you will lose control of your bank accounts for a number of months. That is because the official receiver will spend time looking at how much money you have and working out if any of it can be given to your creditors. On top of that, bankruptcies are in the public interest, and so it will be mentioned online and in your local newspapers. That said, sometimes it is the only way to improve your situation. A good financial adviser should be in the best position to let you know if bankruptcy is the best option for you. Just be aware that someone who has been declared bankrupt is now allowed to run a business.
We hope that at least one of those solutions will help to reduce your debt and get your finances in order soon. There is no time to waste though, and you need to deal with the issues as quickly as possible. For every week you fail to pay your debts, collectors will add charges that increase the amount you owe. There are very few regulations concerning the charges and fees they add, and so you could end up paying back thousands more than you borrowed.
If you need more advice on debt reduction techniques, there are plenty of good posts on this blog. Just make sure that you never borrow money to pay your debts. That is how people get into a never ending cycle. We wish you the best of luck for the future and can’t wait to see the smile on your face when you are finally in the clear. See you back here soon!