09 February 2015

When You Find Yourself In Debt.

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When You Find Yourself In Debt.

Being in debt is an unpleasant experience. The brown envelopes stack up and the persistent phone calls blight your life at home and possibly at work. You certainly need to do something about it. The first thing you must do is obtain some professional debt advice. This is not only to help you decide on the best option, but in order to qualify for some of the options available it is a condition that you have received this advice.

The best thing you can do is look at your finances in detail and find out if there is any way in which you can repay your debts. You should talk to your creditors and see if they will accept reduced payments. If you believe that your financial situation will improve in the next little while, for instance if you are out of work then you may have a job lines up, or you might be anticipating getting a better paid job, then your creditors might accept reduced payments for a limited period or even offer you a payment holiday. It is in both their and your long term interests if, between you, you can come to some sort of arrangement. This way the debts will be repaid and your Credit rating will not be affected too badly.

Another possible way of repaying your debts is to look into some form of debt consolidation. In many cases it is possible to roll up all your various debts into a single debt with a single monthly repayment that is considerably less than you are paying now. Of course it will take longer to clear your debts, but it will be more comfortable for you and you will stop getting hustled by your creditors and their agents.

If there is really no way for you to pay off your debts, then there are three choices available to you, though none of these should be taken lightly as they will all have a severe impact on your Credit rating for years to come. The choices are: to go bankrupt; to take out an IVA or Independent Voluntary Agreement; or apply for a DRO or Debt Relief Order. Which one you go for will depend on how much you owe, your assets and your income.
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