Debt reduction strategies

Article Written By: ColtonCollins

An increasing number of people in the UK are struggling to repay debilitating personal debt. Approximately 27 per cent of those who owe money went further into the red over the past year, and if youre one of them then its time to take action.

The first step is to stop ignoring your debts - this is one problem that wont go away unless you address it head-on. Sit down and work out how much you owe, and whether you can manage the repayments. It may be that youre struggling now, but could reduce your debt if you cut back on personal spending.

If so, its time to make a budget. Add up your monthly income and balance it against what youre spending. Look at areas where you can cut back and costs that could possibly be eliminated. Remember that its almost always better to repay debts that to save money, so address your current money worries before looking to the future.

Of course, its possible that you have a already curtailed your spending habits and are still struggling with repayments. In that case, have a look at how you might be able to cut the interest on your debts. There are plenty of low-cost credit card and loan deals out there, and it might be that you can reduce your repayments simply by switching provider.

Another alternative is to consider consolidating your debts. This involves taking out one loan to pay off all the others, and can be a good option for some people. However, its a good idea to do your research before going down the consolidation route. Try talking to debt advisory groups, who may be able to admit me onto a debt management plan.

If youre unsure of how to proceed, a good option might be to talk to a debt counselor. There are plenty of charitable organisations who have counselors trained to help people with exactly these issues, so dont feel afraid or embarrassed about asking for assistance.

For some people, the only route forward may be to declare themselves insolvent. Its unwise to enter into bankruptcy lightly, as it can affect your career and your credit record in the future.

Finally, whichever route you choose dont opt to walk it alone. Up to a quarter of all UK debtors fail to discuss financial issues with their family, and this can lead to massively increased stress levels. Talk to those close to you about your problems ? the likelihood is that theyll be pleased youre facing up the issue and happy to support you all the way.

About the Author

Jacinta Buonassisi has recently been looking into services that provide debt advice and has made an individual voluntary arrangement with Blair Endersby.

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