Unable to pay back your loan on time, unnecessary expenses? Prioritize your debts: The immediate step to help you get out of debt is prioritizing your debts into priority and non priority debts.
Some debts are more dangerous when compared to others.
Priority debts are the debts that deserve immediate attention.
They include mortgage or any loan secured against your home.
Money owed for tax, VAT or insurance also comes under priority debts.
These are priority debts because failure to repay may lead to repossession of your home or legal action.
Non-Priority Debts include various unsecured loans like credit card debts, money borrowed from friends or family etc.
Although your creditors can take you to court they normally try to reach an agreement with you.
Be realistic and devise a debt management plan with the help of experts.
When you are looking for solutions to get out of debt it is wise to pick a figure you can afford.
Work towards a budget and a repayment plan which you can stick to ensure that you will get out of debt soon.
What is a debt management plan? A Debt Management plan is an informal arrangement between you and your creditors.
With debt management plan you agree to make a payment every month to your creditors.
A Debt Management company will be responsible for all correspondence between you and your creditors.
The duration of the debt management plan is set so that all of your debts are paid in full and can be a good way of re-organizing your finances.
As your creditors are not legally bound by its terms, it does not provide you with any protection.
The debt management plan rescues you when you face the below: Constantly been missing your repayments on credit cards, store cards or other loans.
Dread opening your mail or answering your phone fearing creditor harassment? Borrowing on one card to repay another card which is more important? Turned down for credit? Monthly income never sufficient for your payments? Panic when confronted with sudden expenses Don't get into, another loan instead repay back by carefully planning your income and expenditure.
Seek help to chalk out sound repayment plan to repay all your debts.
But with a little effort and minimal sacrifices you can get out of debt.
Start by going through your bank statements to work out where exactly your money is going and calculate a realistic budget for your needs.
While trying to get out of debt, remember not to acquire more debts.
Classify all your debts into priority debts and non priority debts.
Priority debts are the debts that require immediate attention.
They include mortgage or any loan secured against your home.
Money owed for tax, VAT or insurance also comes under priority debts.
These are priority debts because failure to repay may lead to repossession of your home or legal action.
On the other hand non priority debts include various unsecured loans like credit card debts, money borrowed from friends and family.
You can allay your debt fears with the help of a debt management plan suited for your circumstances.
Clear up to 75% of your debts with in a span of 60 months and influence your credit score positively.
Repair your credit scores gradually.