Are you starting out in a new career but constantly inundated by all the bills piling in? Are you watching your debt climb? Are you feeling absolutely helpless and letting this stress affect your work? Perhaps you’re not even aware of how much debt you’re in. It’s not uncommon for people to live off credit cards these days. When individuals do not have the money to make all of their purchases, those credit purchases quickly turn into debt. With interest being so high, it can be a nightmare to dig yourself out.
If you are currently in debt, you are not alone. There is no need to feel overwhelmed. You can get out; it just takes time, patience, commitment, and sometimes some extra help. You have to face the facts, as avoiding your debt will only make it grow into a bigger beast.
Where Do I Go? What Do I Do?
If you’ve been aggressively trying to get your loan down, you may be looking for specific places to go and specific tools you can use. If you are unable to pay much money towards your loan, you also have the option to apply for an Administration Order, or an Individual Voluntary Arrangement.
- An Administration Order: You can apply for this order through your country court. It is an agreement that is made between both you and your creditors. You can apply for this order if your debt is less than £5,000 and you have a court judgment against you. Based on your income, the court will decide what is fair.
- Individual Voluntary Arrangements (IVAs): For those that have some spare money each month, this may be a good option for you. Once again, this is a legal document that is made between you and your creditors. It needs to be set up by an insolvency practitioner (this will generally be an accountant or lawyer). Although this is a flexible option, you need to be careful. There are risks involved, especially if you do not make your payments.
There are some individuals that simply do not have the option to pay their debt down. Are you serious about eliminating your debt, but you just dont have the funds to make this possible? If so, there are a few options for you.
- Writing Your Debt Off: In exceptional circumstances, you may be able to write off your debt. This will generally be approved if you have low income and you are suffering from a difficult situation. These situations are generally areas that are not likely to improve. For example, you may be very elderly, or have a serious, chronic health condition. You will need to show evidence of your situation (i.e. medical records). If you believe this option is for you, creditors may want to have an adviser request this on your behalf. Find your nearest Citizens Advice Bureau and ask for help.
- Debt Relief Order: If you cannot afford to make your payments, a debt relief order is always an option. This is much cheaper than filing for bankruptcy, and will typically eliminate your debt. This will generally last for a year, and at the end of the year, you are free from the debt listed in the order. This is only available in England and Wales, with conditions attached. In order to qualify, you need to; have less than £15,000 of debt, you have no more than £50 a month to spare, your assets and savings are less than £300, and you have not filed for bankruptcy or gone through any other insolvency procedure (i.e. IVA).
- Bankruptcy: For some, bankruptcy is the only option. You can typically keep household goods and enough to live on. Once bankruptcy is completed, you have a fresh start. The money you owe is written off. Before you opt for bankruptcy, make sure you speak with a financial adviser.
Software and Applications Available
Although it is beneficial to approach a financial adviser for advice, you do not necessarily need a planner. With all the software and apps available, you can begin to plan yourself. There are a number of options available.
- Debt Reduction Software: Some do not feel comfortable planning their debt relief online. If this is the case, you can install software programs to your computer. You may need to pay £15-£30, but this is a small price to pay. Debt Quencher is a great program for Mac users. This software not only helps you plan, but provides you with multiple scenarios based off of your debt input. Debt Analyzer is another great option for those that prefer PC. This software helps you generate a plan, savings you money, and getting you on track.
- Online Apps: The advantage to online apps is that you can access your information from any device or computer (as long as you have your password). There are many free options available, making it an ideal solution for many. Ready for Zero is a free app that provides you with all the tools and information you need to succeed. It helps you make a plan, stay on track through alerts and savings, and then allows you to visualize your progress. Debt Coach is another great option, providing a variety of solutions.
Debt sits on your shoulders and unless you put forth the effort, it will continue to take hold of your life. If you have family members that can help you out, this may be a good option. As mentioned, everyone is in a different situation. Loans from family members can be interest free, but if you do not use the loan wisely, you’ll be in even more trouble.
Buckle down and speak to a financial adviser if you’re lost. There are many options; none of them are sitting there doing nothing about it. You need to step up and take charge. This is your life, do not let it be run by numbers, statements, and creditors. You can be debt-free. Start looking into your options, building a plan, and sticking to it.
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