Debts can weigh heavily on your mind, put a strain on your relationship and even cause stressful lashing-out at loved-ones. Dealing with debt carefully is important and you will find that tackling it head-on will allow you to improve not only your finances, but also your life. Why not look at the best ways to sort out your debt?
The first step to resolving your debt is to stop sticking your head in the sand. The impulse to hide from it is a very natural one, but obviously it won’t help you make payments or become more solvent. Open a spreadsheet and start tallying all your debts, monthly repayments, and repayment terms; this gives you something to work towards.
Give your debts an order of priority by the costliest debt. You need to pay off whichever debt is costing you the largest amount of money first, as this will help you prevent charges and interest from being accrued. Assign this order and stick with it, but remember to scatter some smaller, cheaper debts around. These will give you a sense of achievement; if, for example, you have some smaller catalogue debts that can be paid off quite quickly, you can pop them between some larger debts that will take longer, and get a bit of a sense of accomplishment that will help you keep going.
A debt consolidation loan is a simple way to address your debts. Essentially, you take out a loan for the amount you owe and use it to repay your debts, thus consolidating the lot into a single debt and a single repayment to handle every month. This can be a uncomplicated and effective way to control your debt.
On the other hand, a debt management system can be more suited to your needs. In this system, a debt management company liaises with your creditors. You pay either a set or a flexible amount each month, which the company distributes fairly among your creditors. You have a clear target, and all your debts are tackled at once. Additionally, these systems tend to take overpayments as often as you like, meaning you can set yourself up for a system whereby you pay an amount you can definitely afford, but you’re able to add extra bits on every single month, allowing you to tackle the debts more rapidly.
The last two options are very important to consider if you need to remove the stress from your life. Obviously, living with debt is difficult and when people are haunting you for money every day you can frequently feel trapped. However, both a debt consolidation loan and a debt management system can remove these worries virtually immediately, returning a sense of normality to your life.
An IVA, on the other hand, is a very serious solution for a very serious problem. It will have long-term consequences for your credit and will be a very severe step to take. Take close advice from your debt manager, but be aware that this is not for most people. The solutions above, however, are able to make a far bigger difference than most people would have assumed when setting out.
You can tackle your debt in a variety of ways. As long as you take your head out of the sand and tackle your debt as quickly as possible, you can make a real change to your life and before you know it you’ll be completely in the clear.