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How Do I Get Out of Debt?

Bad credit, a poor credit rating and debt, whether it’s credit card debt, personal loan debt, or even debt to friends, can take over your every waking moment. Sadly, many people have become so depressed due to the constant letters, phone calls and reminders that they’ve seen no way out and money worries are one of the biggest causes of suicide.

Debt doesn’t have to affect you this way as there is help, and not only with debt consolidation loans. There are many organisations that can help, a lot you can do yourself, and people you can turn to before it all becomes too much.

How Do I Get Out of Debt?

Is Debt Consolidation the Only Way to Settle Bad Debt?

A debt consolidation loan is a great way to settle bad debt but it’s not the only way. With a debt consolidation loan or a loan for bad credit, you combine all of your debts, whether they be from catalogues or credit cards, personal loans or payday loans, and you pay one single monthly sum that’s achievable and manageable to you. Many choose this option as it instantly deters the wolves from the door. It pays off creditors, while improving your credit rating over time and showing that credit is being repaid. It also stops any new red marks against your credit score. After a time, you will be able to apply for credit again, but this time, you will be aware of your limitations and in a better position to manage your finances.

It also takes care of all the paperwork, those embarrassing phone calls to the creditors, the negotiations of what to pay back and when, and the endless expenditure forms that ask for details of every penny you spend. It’s simple and easy but again, there are other options if you don’t feel quite ready for a loan to pay off bad debt.

Manage the Debt Yourself

You can manage the debt yourself. It’s a good idea to sign up to a free credit reference agency online, and to see just how bad your credit score is. You may have been avoiding this, but once you accept the situation you’ll be better placed to make steps to rectify it.

Take note of all the creditors, find their contact details online and have your account numbers to hand. Many accept emails now, so you don’t have to talk on the phone. Explain your situation. Most will be happy that you’ve got in touch instead of ignoring their pleas for payment. Offer a monthly sum that you can afford, no matter how small. Then set up a direct debit or set aside a day or two each month to manage your finances. Pay your most important bills first, your mortgage, your rent, your council tax and utilities and then pay the creditors what you can afford.

It will take time but the main point to remember is to keep in touch at all times. If you can’t pay one month, let them know. Ignoring correspondence is how many people slip into a black hole and find it impossible to get out.

Resist the Urge to Get More Credit

No matter how poor your credit rating is there are always loans for bad credit and poor credit credit cards available. These come with very high interest rates and you’ll find yourself paying back twice as much. This is not the way to get out of debt. It’s tempting, but will only offer a temporary reprieve and then you’ll be back to square one.

Talk to Citizen’s Advice

Many people forget about Citizen’s Advice or don’t realise just what help they can offer. They are very good with helping with debts and their service is completely free. Make an appointment and take all the paperwork you have relating to your debts with you. They will make you aware of your options and may even contact some creditors on your behalf.

A debt consolidation loan is the easiest, cheapest and possibly fastest way to get out of debt and it’s ideal for those who don’t want to deal with individual creditors and would like someone else to handle the nitty gritty. However, there are other ways if you’re still unsure. The most important thing is that you find an escape from this weight holding you down, and start to live your life again debt free.

We offer Debt Consolidation Loans for homeowners.

Our team is on hand to help with number of questions you may have.

If you are struggling with debt, please visit Money Advice Service for help and advice.

We are a broker, not a lender.

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