How to Clear Debts

How to Clear Debts: A Comprehensive Guide to Financial Freedom

Debt can be a significant source of stress and anxiety for many people. It can feel overwhelming whether it’s credit card debt, loans, or other types of debt. However, it is possible to clear your debts and achieve financial freedom. This guide will provide the tools and strategies to help you get out of debt and take control of your finances.

Create a realistic budget.

The first step to clearing your debts is to create a budget. A budget is a financial plan that helps you track your income and expenses. To create a budget, follow these steps:

Determine your monthly income: This includes your salary, wages, and other income sources.
List your expenses: This includes your rent/mortgage, utilities, groceries, transportation, entertainment, and any other expenses you have.
Subtract your expenses from your income: This will give you an idea of how much you have left over each month.
Identify areas where you can cut back: Find ways to reduce your expenses, such as cutting back on dining out, cancelling subscriptions you don’t use, or finding a cheaper cell phone plan.

Managing Your Debts

Once you have created a budget, the next step is to manage your expenses to help clear debts. Here are some tips to help you:

List all your debts: Make a list of all your debts, including the balance owed, interest rate, and monthly payment.
Prioritise your debts: Focus on paying off high-interest debts first, as these cost you the most interest charges.
Consider debt consolidation: If you have multiple debts with high-interest rates, consider consolidating them into one loan with a lower interest rate.
Negotiate with your creditors: If you struggle to make payments, consider contacting your creditors to negotiate a payment plan or reduced interest rate.

Tips to Clear Debts

Paying off your debts can be a challenge, but with determination and discipline, it can be done. Here are some tips to help you:

Make extra payments: If possible, make additional payments on your debts to pay them off faster.
Use the debt snowball method: This involves paying off your smallest debt first, then moving on to the next smallest debt. This can give you a sense of accomplishment and motivation to keep going.
Consider a side hustle: Consider taking on a part-time job or starting a side business to generate extra income that can be used to pay off your debts.
Stay motivated: Remember the benefits of being debt-free, such as having more disposable income, less stress, and greater financial security.

FAQs:

How long does it take to clear debts? The amount of time it takes to clear your debts depends on several factors, such as the amount of debt you have, your income, and how much you can afford to pay each month. It could take months or even years, but with discipline and determination, it is possible to become debt-free.
Should I use a debt settlement company? Debt settlement companies can negotiate with your creditors on your behalf to reduce your debt, but they often charge high fees and negatively impact your credit score. It’s best to try to negotiate with your creditors yourself or work with reputable credit counselling.

Our experienced team at Debt Support Direct are regulated by the FCA and are debt experts who have helped thousands of clients across England, Scotland & Wales clear debts with solutions available.

List all your unsecured debts and find accurate balances and account numbers.
Using your recent bank statements, write down your monthly income, including salary, any benefits, and other payments you receive.
Go through your direct debits and note your essential expenses, including mortgage or rent, Council Tax, utility bills, insurance, car payments or travel costs.
Calculate how much you spend on food, clothing, regular hobbies and social spending. It is still important to note these costs.
We follow government guidelines for any non-essential expenditure, so we can change this for you if you have budgeted too little or too much. You will need to stick to the budget agreed upon for the duration of your plan, so be realistic about how much you need.

If you have used our online application form, we’ll reach out to you to run through your income and outgoings and discuss your options so you can make an informed choice. At Dent Support Direct, we offer all statutory debt solutions in England, Scotland, Wales, and Northern Ireland so you can choose a solution tailored to you and your circumstances.

Once you choose the most appropriate debt solution, there will be some paperwork to fill in to put the payment programme in place. After this is done, you will make one monthly payment for the duration of your plan to pay off your debt.

Call us on 0161 549 9848

If you have used our online application form, we will contact you to run through your income and outgoings and discuss your options so you can make an informed choice. At Debt Support Direct, we offer all statutory debt solutions in England, Scotland, Wales, and Northern Ireland so that you can choose the debt solution tailored to you and your circumstances.

If you have an attachment of benefits and have chosen the debt solution that you feel is the most appropriate, there will be some paperwork to fill in to put the debt solution programme in place.

Our debt advice is free, non-judgmental, and friendly, so if you are struggling with debt, speak to one of our experienced debt experts for a confidential chat on 0161 549 9848.

Credit Reports

Get a copy of your credit report today by clicking: CREDIT REPORT
Learn the SIX BEST WAYS to rebuild your credit score by clicking: REBUILD CREDIT SCORE

Which Debt Plans apply to you?

We assess your circumstances based on your individual circumstances and will assess for all available debt advice solutions.

Please find below a list of debt solutions we will evaluate for:

Debt Management Plan (DMP) – Information on a debt management plan
Individual Voluntary Arrangement (IVA) – Information on an IVA
Debt Relief Order (DRO) – information on a DRO
Bankruptcy – information on Bankruptcy

If you have an attachment of benefits and have chosen the debt solution that you feel is the most appropriate, there will be some paperwork to fill in to put the debt solution programme in place.

Our debt advice is free, non-judgmental, and friendly, so if you are struggling with debt, speak to one of our experienced debt experts for a confidential chat on 0161 549 9848.

Free and impartial money advice is available from the Money Helper, an organisation set up by the Government for people in debt.

Important Information

Debt Support Direct does not administer any debt solutions; we will assess your debts, circumstances and affordability and signpost you to an organisation or charity that can set up and help the debt plan you decide suits your circumstances.

All debt solutions should be very carefully considered. Some providers may charge fees if a solution is taken; if applicable, these will be outlined during your consultation.

Your ability to obtain further credit in the short term will likely be affected, which may also be the case over the medium to long term. Calls from mobile phones and other networks may be charged to our free phone number.

The Financial Conduct Authority regulates Ruby Holdings Limited, trading as Debt Support Direct. We can offer debt advice for both formal and informal solutions. All debt solutions must be carefully considered, and you must take independent advice.

There are sources of free debt advice and services. You can find out more by contacting the Money Helper on 0800 138 7777 or visiting moneyhelper.org.uk

Here are some links to UK debt charities that can provide help and advice on managing debt:

Please carefully read the information on these websites to understand what services they offer and if they would fit your needs. Reaching out for help as soon as you start having difficulties managing your debts is important. These organisations can help you understand your options and work with you to develop a plan to get back on track.