10 Steps to Eliminate Debt

Unlike before, it’s not just those who are on the lower end of the spectrum who are worried about debt. It has affected even middle and high earners as well, given that the cost of living continuously rises.

1 Stop ignoring it

Ignoring your debt only adds up even more because of interest. Furthermore, ignoring it won’t make the debt go away – or take away the stress you feel because of it.

2 Tell your closest family and friends

By admitting and confessing your debt problem, it could lift a heavy load off of your shoulders and even get advice and support to help you execute your plans.

3 Tell your creditors and bank as soon as conveniently possible

According to the Lending Code, financial institutions are to act with compassion and sympathy and provide advice as appropriate. By letting these people know of your situation, you can strike a deal with them help you pay back the money you owe.

4 Create a budget plan

Being able to see where your money goes, and how much you have left to spend makes it easier to manage your money well. This way, you don’t have to turn to credit cards for any ‘emergency’ purchases. You can also see where you spend a lot and try to see if you can cut back.

5 Identify secured from unsecured debts

There are different kinds of debts – generally, they are classified as secured (with collateral) or unsecured (no collateral). Make sure that your secured goal is repaid regularly as this endangers your property from being repossessed by the credit company.

6 Prioritize your debt

Now that you know which loans to pay first, you can start paying the debt off by first closing the high-interest debt first. It is possible to consolidate the debt into one loan, so tracking is not as difficult.

7 Halt your savings

Right now, your main goal is to pay your debt. The interest in your savings account is measly compared to the interest rate that is adding up to your outstanding balance.

8 Ask for help

There are many debt advice agencies that offer services when it comes to debt advice.

  • Advice UK: adviceuk.org.uk
  • Citizens Advice: citizensadvice.org.uk
  • Consumer Credit Counselling Service: nationaldebtline.co.uk
  • Payplan: payplan.com

9 Consider your available options

If you are in serious debt, you can consider about declaring bankruptcy or seeking an IVA. It is best to consult with the above agencies to determine your best course of action.

10 Live in positivity

By making proactive steps and being honest and transparent about your debts, it creates a feeling of lightness despite the situation. Furthermore, receiving the support of loved ones and friends helps motivate and inspire as well.