How To Get Out Of Your Debts?

December 11th, 2019

Tips to create a plan of action to sort out a debt

Debts can be painstakingly difficult to handle. They leave you feverish and uncertain about the future. If you have any outstanding bills then you cannot even think of going on holidays or buying expensive stuff. So, the best way to get out of debts is to deal with them smartly. Find here, some of the simple ways to get out any outstanding bills and long pending debts. The methods will help you to create a plan of action to sort out your debts.

How to deal with the debt issue?

Face it: The first thing is to get out of the escapist mode and face the real situation. There is no need to panic as things can be worked out even when they seem impossible. So, be ready to face the challenge and come out of it as a survivor, if not the winner. For this you have to first find out the total debt that you have. After this, you can sort things out easily.

Sort out the debt: Write down all the debts on a piece of paper. Write about the amount of money you owe to each lender. You can make a list which includes the lender’s name, amount to be paid, deadline of repayment and the risk if unpaid. This will give you a clear picture.

Prioritise: Once you have a clear idea about every debt in your head, start prioritising your finances. Put the urgent ones at the top. See if you have any alternative to the less urgent ones. Estimate the amount you can pay for the prioritised ones. Be ready with the entire plan. If you cannot pay now then by what time you would be able to make repayments. Keep this estimation in hand.

Contact the creditors: Be it a mortgage, insurance or a loan, you can easily contact the creditors and discuss the current scenario. Be honest in informing your situation. Most of the times, the credit providers will find a middle way out for you. They may divide your payments into smaller instalments or suggest schemes that demand low interest rates. So, talk to them and see what can be done. You can easily tell them about the amount you would be able to pay each month and so, a new pay back plan can be worked out.

Contact local agencies: You can also take advice from the local Citizen Advice Bureau and other agencies to solve the debt problem. They will help you to devise a solution that is easy on the pocket and on the mind.

Once you have things planned, just start making payments as soon as possible and as much as you can. Slowly but steadily you will come out of the urgent debts.

Deal with non-priority debts: Once you have a fixed plan set for the priority debts, start thinking about the ones that can be given secondary treatment. Debts like overdrafts, unsecured loans, and credit card accounts can be considered as non priority debts. Remember, these debts may not be urgent but may still take you to court. You may have to pay much higher than expected interest as these debts are expensive.

  • Contact the creditors: Instead of ignoring the letters and phone calls from these creditors, just talk to them about the current situation and how you are dealing with debts. Ask them if they can provide you with the option of ‘freezing the interest’. In this case, you don’t have to pay the interest for a time period but do have to make repayment for the debt. There are good chances that they would offer you extra time to make repayments.

    To be on the safer side, just note down the details of each meeting or telephonic conversation you have with the credit provider. Inform them about your plan like if you are resuming the job or pay through Payment Protection Insurance or if you are going to sell some of your belongings to pay off the debt. Also, discuss the exact time you will take to make all these arrangements.

  • Show evidence: Show them any written evidence that confirms that you will be able to pay this much by a specific time period. You can show your available income that is the money you have after paying for expenses and priority creditors. You can share the remaining income between by offering certain percentage to each creditor. These are called pro-rata offers.

  • Negotiate: You need to persuade them for – freezing interest so that the debt does not increase while you are making repayments. Next you should be clear about the regular intervals of payment that could be monthly or weekly. If there are any chances of change in plan of repayment due to any reason then do mention that probability in advance.

  • Try professional help: If you think these kinds of negotiations are not your kind of thing then take professional help. You can take help from a debt management company or an Insolvency Practitioner to manage your non urgent but important debts.

Based on the plans suggested by the professionals and your credit providers, you can come to a unanimous decision on how to repay the non priority debts. So, start paying as soon as possible. Maintain a budgeted plan every month and see it gets followed until you come out of the debt completely.

For more on dealing with credit issues just check our guides on or you can call us on 02034757476.

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