The truth about bankruptcy
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There are ways you can get out of debt. Some ideas here.
If you're in debt it can be hard to know your best course of action.
1. Admit you're in debt
It's hard to tackle a problem until you admit that it is, in fact, a problem. Facing up to the fact that you have debts and you need to clear them is the first step towards getting out of debt.
2. Work out how much debt you're in
If you have a number of debts, it can be difficult to keep track of them all. It should help to sit down with statements from all of your lenders and figure out just how much debt you're in and how much it's costing you every month. If you're not sure how much you owe - or you can't find your statements - you can get in contact with your lenders and ask.
3. Don't get into any more debt
It sounds silly - but it can be so hard to tackle your debts if you're continually adding to them. If possible, resolve to stop spending on your credit cards, chipping into your overdraft or taking out any other kind of credit.
4. Make a budget
Before you know how much you can afford to pay towards your debts each month, you'll need to know how much you earn and spend each month. Start with your priority costs - like your mortgage, utility bills, food and so on. See how much they cost you each month - and how much you have left over afterwards.
If you can afford to 'overpay' your debts a bit (pay more than you actually have to towards them), you might want to consider cutting back on life's little luxuries for a while. As you save money you can use it to repay your debts more quickly.
5. Ensure your essential costs aren't higher than they need to be
While you're looking through your budget, have a look at your essential costs, like your bills and food. Make sure you have a look on comparison websites or get expert advice to see whether you could pay less for your utilities. Consider switching 'down a brand' in the supermarket: for example, switching 'finest' and branded products to value or own brands.
6. Prioritise your debts
You then need to decide which debts you need to try and clear first. This can mean tackling the debts with the highest interest rates - as they will grow the most rapidly.
Some people find it more rewarding to tackle the smallest debt first, however, as this gives the satisfaction of clearing a whole debt in full faster. This method can really help people who find it difficult to motivate themselves when they're overpaying their debts.
7. Get expert help
These tips are all very well, but if you've tried everything and you're still struggling - or you're simply not sure how to get started - it's well worth seeking expert advice.
If you can't meet your repayments each month, or you just want to make the process a bit more manageable, there is probably a debt solution that could suit you.
by Sarah SymonsBack to blog home