Debt Solutions: How to Become Debt Free
This is bonus content for the readers of our debut book, Financial Joy.
In our book, we covered our tried and tested 10 steps of The Debtonator® Method to help you become debt-free.
These 10 steps helped us to become mortgage-free in 7 years and 100% debt-free.
What if your debt situation feels completely out of control and beyond the point of no return?
This is where exploring the available debt solutions from reputable debt advisers and charities comes in.
What are Debt Solutions?
A debt solution offers you a way to take control of your debts.
There are a lot of companies out there promising debt solutions to help you become debt free.
Sadly, a number of these are scammers so make sure that you only speak with reputable companies.
Debt charities that help with such debt solutions include StepChange.org, Capuk.org or CitizensAdvice.org.uk.
When you get in touch with these organisations, debt solutions available to you include:
- Debt Management Plans,
- Debt Consolidations,
- Debt Relief Orders, and
- Individual Voluntary Arrangements (IVAs).
The type of solution that you might get help with depends on the type of debt that you’re in and how bad your situation is.
Here is a summary of debt solutions by priority vs non-priority debt:
Each of these solutions has its pros and cons, which you need to consider very strongly before proceeding with any of them, if at all.
Here is a spotlight on some of these to be aware of:
Debt Solutions: Pros and Cons
What Else Should You Consider Before Choosing a Debt Solution?
Here are practical things to do before going ahead with a debt solution:
1. Seek Professional Advice
Consult with a reputable debt advice organisation or financial advisor to explore the best solution for your specific circumstances.
They can help you understand the implications and guide you through the process.
2. Understand the Impact on Credit Rating
Most debt solutions will have an impact on your credit rating.
Consider the long-term effects on your ability to obtain credit and whether this aligns with your financial goals.
3. Review Costs and Fees
Some debt solutions may involve fees or costs.
Understand the financial implications and ensure that the overall cost is justified by the benefits.
4. Commitment to Repayment
Assess your ability to commit to the terms of the chosen debt solution.
Failure to stick to the agreed-upon terms could lead to further financial difficulties.
Conclusion
Ultimately, the worthiness of a debt solution depends on your unique circumstances and the specific details of the solution.
Seeking professional advice is crucial to making informed decisions about managing your debt.
Remember, you're never alone when it comes to debt.
So many people have been there and also currently experiencing the same things as you.
The worst thing you can do is bury your head in the sand.
Small action steps like opening up your debt letters and even talking about your debt will help you manage the emotions related to debt and take action.
What to read next about becoming debt-free:
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