Facing up to your debt: taking the hardest step
- Date: 2007-09-25 - Word Count: 437
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Over the past few years, money matters have stolen front page headlines more often than in the past - highlighting some of the money problems faced by many UK households. Often, these headlines point to the rising rates of debt in the UK, with millions of individuals and households struggling to repay their mortgages, credit cards and personal loans.
Recent years have been unkind to borrowers, with soaring interest and inflation rates coupled with the ever-increasing house prices having resulted in many borrowers finding their debts spiralling out of their control. But while it may be difficult to face the harsh reality of being in debt, many financial experts agree that the sooner the problem is recognised, the sooner solutions to the debt problem can be sought out.
Once a debtor has made the first - and hardest - step of facing up to their debt, they will be better placed to look at their situation. Some people will attempt to handle the debt problem themselves, while others may remortgage their home in order to free up funds to clear debts. Other still will turn to debt consolidation, or debt management schemes. But before any decision is made, it is often a good idea to seek professional advice on how to proceed with tackling the problem.
Debt management schemes involve negotiating lower monthly repayments with your creditors, as well as freezing interest on any outstanding balances. While this can help you get back on track with your finances, bear in mind that the time taken to repay the debt will increase greatly. Furthermore, in most cases your credit status will also be adversely affected making it difficult to obtain credit in the future. There are many companies advertised on TV and in the national press who offer debt management services and advice.
Debt consolidation, on the other hand involves arranging a personal loan with which to pay off any current debts and replacing them with a single monthly repayment. In recent years, this has become a popular method for debtors to clear their debts, although in most cases it is only available to mortgage payers. If you are considering a debt consolidation loan, there are many lenders available who can help, although shop around to ensure you get the best possible rate.
However, if your debt problem is really severe, it might be necessary to enter into an IVA or as a last resort consider bankruptcy. These options are handled by licensed insolvency practitioners and can be quite complicated and should only be considered after seeking specialist advice.
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Paul McIndoe is an online, freelance journalist. He lives in Edinburgh with his two dogs.
Recent years have been unkind to borrowers, with soaring interest and inflation rates coupled with the ever-increasing house prices having resulted in many borrowers finding their debts spiralling out of their control. But while it may be difficult to face the harsh reality of being in debt, many financial experts agree that the sooner the problem is recognised, the sooner solutions to the debt problem can be sought out.
Once a debtor has made the first - and hardest - step of facing up to their debt, they will be better placed to look at their situation. Some people will attempt to handle the debt problem themselves, while others may remortgage their home in order to free up funds to clear debts. Other still will turn to debt consolidation, or debt management schemes. But before any decision is made, it is often a good idea to seek professional advice on how to proceed with tackling the problem.
Debt management schemes involve negotiating lower monthly repayments with your creditors, as well as freezing interest on any outstanding balances. While this can help you get back on track with your finances, bear in mind that the time taken to repay the debt will increase greatly. Furthermore, in most cases your credit status will also be adversely affected making it difficult to obtain credit in the future. There are many companies advertised on TV and in the national press who offer debt management services and advice.
Debt consolidation, on the other hand involves arranging a personal loan with which to pay off any current debts and replacing them with a single monthly repayment. In recent years, this has become a popular method for debtors to clear their debts, although in most cases it is only available to mortgage payers. If you are considering a debt consolidation loan, there are many lenders available who can help, although shop around to ensure you get the best possible rate.
However, if your debt problem is really severe, it might be necessary to enter into an IVA or as a last resort consider bankruptcy. These options are handled by licensed insolvency practitioners and can be quite complicated and should only be considered after seeking specialist advice.
-----
Paul McIndoe is an online, freelance journalist. He lives in Edinburgh with his two dogs.
Related Tags: credit card debt, debt management, debt solutions, ivas, money problems, debt management plans
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