According to research, there are around eight million people in the UK who regularly miss bill repayments and are feeling overwhelmed by their debts.
Getting out and staying out of debt involves more than just paying off a few credit cards and loans. It means changing spending habits; learning to how to budget; knowing who and how much you owe and to be able to adhere to a debt repayment programme.
Anyone in debt will know how stressful and unpleasant it can feel. as finding a way out is not always easy.
If you are feeling trapped and are looking for a way to deal with in a spiral of maxed out or overdrawn credit cards, unpaid rent, bills and more, we’ve highlighted a simple step by step plan that can help you to get your finances back on track:
List and Prioritise your debts
Although it is easy to lose track of your debts, if you are going to be able to create a realistic repayment plan you will need to know exactly how much you owe to each creditor.
Take some time to complete a list of everything and everyone you owe in order that you can prioritise your debts, a recent credit report can help you with this task.
As some debts may be much more urgent than others, those who are threatening legal action or charging you higher rates of interest should be contacted first.
Create a budget and stick to it
It is difficult, if not impossible to gain control of your finances unless you have a budget in place. There always are areas where you can shave a few quid to free up extra cash that can be used towards what you owe.
Make a list of your incomings and outgoings each month and work out how much you have left after paying your bills to establish how much you have left that can be offered two your creditors. If your outgoings are higher than your income, then you need to make some cutbacks. Whether this means going out a bit less or cutting back in luxuries, it’s important to come up with a realistic and affordable solution quickly.
If you have got into the habit of always using credit or store cards it may make sense to cut them up and switch back to using cash, so you are in full control and aware of exactly how much your spending each month.
Get on the phone with each one of your lenders to explain your situation, they may be willing to accept a temporary repayment plan allowing you some time to get back on your feet.
Contact your creditors
Consider switching the balance of your credit cards to those offering 0% balance transfer deals.
Change your spending habits and don’t take on any new debt.
We are all creatures of habits, week in and week out we shop at the same stores, buying the same things because it feels good and what we are used to doing. However, in doing so, it could be costing us more than we can really afford and be causing us to run up high credit and store card bills
Until you get back in control of your finances you should learn to live within you means. If you are to have any chance of clearing your debt, you will have to change your spending habits, or you may never get out of debt. If you can’t afford something, don’t use credit to buy it and always think twice before making any large purchases.
Make a start by reviewing your spending and cut out the luxuries that you don’t really need and will soon see an improvement in your finances. You don’t have to do without, you just need to prioritise your spending and make better choices on how you spend your money.
Don’t Struggle alone
If you can’t take control and feel unable to make ends meet, then get help immediately. The longer you leave it the worse the situation will get, the sooner you get help the more options you will have to help to clear your debt. Living in Scotland, there are several Scottish debt help solutions available help you manage your debt, and these include:
Debt Management plan and Debt Arrangement Scheme
Both debt management plans and the debt arrangement scheme require you to repay your debts in full. Depending on your level of debt and disposable income available for your creditors this can involve a long repayment term.
Trust Deeds Scotland
A Trust Deed in Scotland may allow you to become debt free earlier. Scotland Trust Deeds provide many of the same benefits as debt repayment plans but with potentially a shorter repayment term (normally 4 years). Once the agreed repayment term is completed and subject to having adhered to the terms and conditions of the Scottish Trust Deed, a substantial amount of your debt can be written off.
Debt Advisory Services Scotland provide a free financial review service to help identify the best solution for you to deal with your debts. Our review service is completely free and there is no commitment for you to action any recommendations that we make.
If you are worried about your current level of debt and If you are interested in finding out more about the available debt help in Scotland contact Debt Advisory Services Scotland today on 0141 956 4088 or on 0800 011 2322 and speak to one of our friendly and experienced debt advisors.
Debt Advisory Services Scotland is regulated by The Financial Conduct Authority to provide debt advice to people living in Scotland.
Free advice is available from the Money Advice Service who can be contacted on 0800 138 7777.