How to Eliminate Debt
Woman and debt
Reports have shown there is a rise in debt amongst woman, from working woman to young mothers. The pressure in the playground car parks and the desire to be look like celebrities and access to easy credit is making borrowing easier than ever. Research by mumsnet.com suggested that nearly a thirds of new mothers feel the pressure to use the popular brands for their babies.
They also felt the need to spend on beauty treatments, gym equipment and 'miracle creams' to regain their post baby figures. Another survey from co-operative insurance claims woman spend on average $250 per month on skin, hair nails and other beauty treatments.
How to eliminate debt
If you find you're in a position where your finances are struggling there are options to eliminate debt. Although there is not any quick fix to the problem there are measures you can take to start to rebuild and pay off your debts.
- Make a list of all your debts
- Know exactly how much you owe and who it is owed to.
- Put your debts in to priority order
Priorty debts are defined by debts that take the most action against you, for example you could lose your home. They may not necessarily be the ones you owe the most to, but these are the ones in which to pay first.
Non-priority debts include things like:
- credit card and store card payments
- overdrafts on your accounts
- money you've borrowed from family or friends
Work out a budget
To help eliminate debt make a personal budget and stick to it, you will need to work out all your income and all your out goings. Look where cut backs can be made to help eliminate debt quicker. You will need to look at what you can afford to pay back your creditors realistically.
Speak to your creditors
Explain to your creditors or get help from a debt management company who will speak to them for you. Explain your situation, make them a realistic offer of how much you can pay them back. Remember you need to get of debt with your priority creditors first.
Get help to eliminate debt
there are companies and free debt counseling out there who will be able to help you to get on your way to eliminate debt. Some charge for there services others are free services. They can offer debt advice, help with debt consolidation and advise you of your best options.
Debt relief orders
Debt relief orders are an alternative to bankruptcy if your debt is lower than $15,000 and you do not own a home. There are certain cost and conditional requirements for using this method to eliminate debt. Your disposable income will need to no more than $50, debt relief applications can only be made though official debt specialists.
Debt management is becoming a more popular method for people to eliminate debt. Some debt management services do not charge a fee, but some others may do. They will contact your creditors on your behalf to try to make arrangements of realistic payments. Debt management services will help you to work out all your expenditures and what income you will have left over.
This might be an option for some people but it depends on the circumstances. Some people may no longer qualify for credit and will not be able to have another loan. A consolidation loan can help you on your way to eliminate debt by putting all there current loans together into one loan. It can help reduce the monthly payment and you only need to pay one loan a month instead of trying to pay several. Most of these loans are secured against your property, it is essential to consider can you keep up with the payments, otherwise you could lose your home. Therefore most people may not want to use this method to eliminate debt.
This method to eliminate debt is used mostly in the US, there is not really used in the UK. Debt settlement is where you reach a settlement figure with the creditors at a lower amount than what you owe. The UK offer Iva's rather than debt settlement, this can help you to eliminate debt more quickly. Individual voluntary arrangements are for people who are usually in severe debt. People with serious debt who genuinely can not afford to pay this back may have up to% written off. This will affect your credit rating for up to six years.
They are free confidential advice lines, they can talk to you and advise how eliminate debt
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Remember it is always useful to speak to a professional to find the best way to eliminate debt.