Options to Consider in Clearing Your Debt

Paying your debt or keeping up with your financial commitment is a day-to-day struggle. We have outlined some common options that you can work on, but it is also wise to consult professional advice if you have struggles in implementing it out alone.

CONSULT OTHERS FOR IMPARTIAL DEBT ADVICE – Seeking partial advice should not cost you. You can approach groups or organizations in your area. They will help you to decide the best options to manage or clear your debts.

OPTIONS AVAILABLE IN CLEARING YOUR DEBT – Lots of debt solutions are available – which one will be suitable for you depends on your personal circumstances. You may be able to reach an informal arrangement with the people or organizations you owe money to (also known as your creditors) to make payments based on what you can afford after essential household outgoings. For this sort of arrangement you would also ask them to freeze interest and charges.

> The Debt Arrangement Scheme – It is a free debt arrangement solution that lets you arrange your debts over time at a rate you can afford. While doing this, you will get a protection from creditors who are trying to recover their money.

> Debt Management Plan – It is a kind of arrangement set up between you and your creditors, wherein you will pay an amount you can well afford on a non-priority debts. It sets out how much you will repay and agrees a timetable for repayment. This is normally a monthly payment to a debt management company that manages to pay your creditors.

> Trust Deeds – It is a voluntary arrangement between you and creditors to pay back part of what you owe. This allows you to make a monthly payments against your unsecured debts, usually short term debts. Once that period is over, the rest of the debt is written off. Creditors in the trust deed are prevented from adding more interest to the money you owe and from taking further court action against you.

> Bankruptcy – It is a way of dealing with debts that you can no longer pay. If you declare bankruptcy, assets you have under your name will be used to cover your debts. Before declaring so, make sure to speak with a free debt adviser first. After a certain period of time, most of your outstanding debts should already be written off.

> Full or Final Arrangements – If you have funds coming in that will cover partial of your debts, you can inquire from your creditors if they accept a partial payment and allow you to write off  the amount balance. Alternately, they might allow you to make monthly payments for an agreed period of time, until the full balance is written off.

Author: Michael Welter

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