If you feel like you’re drowning in debt, it can be hard to picture a rosy financial future. How are you going to save for anything big or prepare for retirement if you can’t see past the debts looming over you? It can all be a bit overwhelming, and worrying about paying everything off can cause a lot of stress. While there’s no simple, magic solution, there are several ways that you can deal with your debt. If you’re willing to put your mind to it and come up with a plan, you can sort your debt out once and for all.
Consolidate Your Debts
Trying to keep track of lots of different debts is tough. Payments go out at different times of the month for various amounts, and you always need to make sure you have enough for each one. If you’re finding it difficult to keep track, you can try consolidating your debts. Instead of having lots of things to pay, you can put everything into one or perhaps two payments. You can do this with a debt consolidation loan or sometimes using a credit card can be appropriate too. It means you only have to worry about one debt and one lender, instead of several.
Switch Your Credit Cards
When some of your debt is from credit cards, there’s one simple solution that you might find handy. Many credit cards have 0% interest introductory rates and allow you to transfer your debt from other credit cards. If you can find a card that’s suitable for you and will allow you to move your debt over, you could save a lot on interest. For at least a few months, and sometimes up to a year or 18 months, you should be able to move your credit card debt over to your new card and benefit from paying no interest on your payments.
For some people, bankruptcy might seem like the best option. When you declare bankruptcy, you can have some of your debts written off. This doesn’t work for all debts, but it can help you with many. Before deciding if bankruptcy is for you, you should get debt relief advice to understand the advantages and disadvantages. Depending on your income, you might need to make payments towards your debt, and it also affects for credit rating for several years. Bankruptcy also requires a fee, so it’s important to take this into account.
Create a Debt Payment Plan
Just creating a budget and coming up with a plan to pay off your debts can make a big difference. If you feel like you’re not in control of your finances, spending some time working out what to do should help you feel more comfortable. Take stock of all of your debt payments and other expenses to work out what to prioritise and how you can save. There are several ways to approach paying off your debts. Some people focus on paying off the smallest debts first.
Get a handle on your debts by exploring your options to get them organised. A bit of organisation can go a long way.