How to manage Debt Management

The first step to managing your debt is the knowledge of what you have and what you dont.

You  may not even be aware that negotiation, for example could be a solution  to your debt management problems. So its a good idea to get a handle on your  financial situation so you know what options are suitable and you can  begin to plan your debt free future.

Below are the first steps to auditing your assets.

Step 1: Analyse your income and expenditure, what costs are essential? What is wasting your money?

Step 2: What non-essential spending can you cut back on to free up capital to repay debts?

Step 3: Plan a course of action (Counselling, Bankruptcy, Negotiate) using the information you have collected.

You will need to show a clear worksheet of your monthly income and expenses if you are intending to do any of the following:

Sign up with a credit counselling service

1. File for bankruptcy

 

2. Negotiate with creditors for alternate repayment plans and reduced settlements

Our  website should be viewed as an essential tool in resolving and managing  you debt. The menu on the right has advice to reduce expenditure and  develop your own personal budget you can stick to. Keeping a diary is  one way to discover in depth what income is being wasted. You may be  wasting up to 500 a month which otherwise could be reducing your  debts.

The majority of adults today are in debt. Being in debt is not always a bad thing  provided you can manage the debt. If it wasnt for the availability of credit peoples quality of life would be a lot worse. If  you had to save for years before you could afford your 5,000 car your  standard of living would be a lot lower while you did this and only the  rich would ever own a house!

However, if you are not coping with your debts, being in debt can be a nightmare! You are probably struggling to live on a shoestring budget. You  may juggle one debt with another i.e. borrow from Peter to pay Paul.  You have probably received constant letters requesting money from you.  You may have heard from bailiffs threatening to remove your possessions. A  default notice could be registered on your credit file which will  damage your credit rating. There is also the threat of court action  resulting in a county court judgement (CCJ), or even losing your home.

If you are not paying off your debts you will need to begin managing them effectively and sooner, rather than later or maybe apply for a iva advice. If  you have just one debt and you are finding it impossible to make the  repayments necessary you should try to negotiate with your creditor to  reduce the amount of repayment you need to make per month. Provided you  are paying off the most you can afford, there is often very little they  can do legally. You may need to make sacrifices and cut down on your spending. If you have several creditors the first thing you should try to do is get a consolidation loan. With  a consolidation loan the sum total of all your debts is consolidated  into one debt, so that you have only one creditor. Having only one  creditor reduces the interest you pay and is less stressful than paying  several creditors. When seeking a consolidation loan you should avoid  debt management companies. These companies are notorious for exploiting  debtors with their high fees. Another option is filing for bankruptcy.