Understanding Your Options When Faced with Debt

When faced with debts that you are struggling to pay, you’re sure to feel stressed and overwhelmed. What you need to remember is that there are options available to you that can slowly but surely help your finances to recover. Keep reading for a few of these.

Short Term Loans

If you have a payment due before the end of the month that you can’t afford, a short term loan is perhaps the easiest option. Also known as a payday loan, you can basically borrow the amount of money that you need, and then pay it off on payday. Whilst this isn’t an option for people in piles of debt, if it can help you avoid more trouble, it can be a good plan.

Debt Management Plan

If your debt is more serious, a debt management plan may be a better option. This involves talking to all of your lenders and agreeing on a new repayment scheme. This will require you to pay one monthly fee that you can afford, which should lower your stress levels. You may also be able to freeze your debts so that you can pay them off without incurring additional interest.

Bankruptcy

Bankruptcy is traditionally the final solution for those faced with debt as it can have longstanding consequences. However, if you have overwhelming levels of debt that you will never be able to repay, it can be the best choice. Keep in mind, though, that any assets you own may be sold off when you file for bankruptcy, and it’s unlikely that you’ll be able to have any form of credit for at least six years.

Other options, such as IVA’s, and trust deeds, are also available, so do speak to a debt management advisor if you are struggling.