If you live in Scotland and are looking to get out of debt in 2018 then these tips and advice may help you.
Here at Scotland’s Trust Deed we have years of experience and our friendly debt advisers are experienced in helping people like you resolve their difficult financial situation.
There’s no doubt that it can be a crippling issue being in debt and the bills will not stop landing on your doormat but if you are struggling financially to cope there is help available.
It’s also true that around 8 million people regularly miss paying their bills in the UK or are feeling overwhelmed by debt.
Despite this fact, just one in five of us decide to seek debt advice.
One money organisation says around 10% of the population could be dealing with serious money problems in silence with those having large families, single parents and young adults who rent their homes being at higher risk.
Tips to help you get out of debt
So, here are some tips to help you get out of debt.
Step one: Understand your position
You need to be honest with yourself so get together every statement from your bank, credit cards, store cards and loans and work out how much you really do owe.
You need to calculate what the monthly repayments need to be and how much interest you are paying.
For many people who have never checked their overall debt situation this can be a sobering moment. The amount they need to pay every month just to service their debt can be huge.
Step two: Prepare a budget
It’s not just about preparing a budget to help you get out of debt but being prepared to stick to it.
You will need to list all of your income and outgoings with the essential bills such as your mortgage or rent, council tax and energy bills being top of the list because these must be paid.
You also need to work out how much you spend travelling to work and how much you spend on food.
Obviously, there will be other bills such as the telephone and Internet, clothing, insurances, holidays and birthdays.
This is where you need to reduce your outgoings so see what you can do without and the money saved can help to pay off your debt.
Step three: Focus on expensive debt
As part of your preparations, you will appreciate that some debts have a higher rate of interest than others. These debts are costing you the most and these need to be dealt with as a priority.
It’s also important that you do not run the risk of late payment fees on these debts which will make it even more expensive.
Step four: Switch debt
Now you’ve seen which are the expensive debts, is it possible to switch this debt to another provider or type?
For example, in the UK we owe more than £63 billion on credit cards, that’s around £2,500 per household, and with a £2,000 balance it will take around 26 years to clear with an APR of 18.9%.
However, if you switch that credit card bill to another provider offering a 0% balance transfer deal then the debt can be cleared in 43 months by paying them £48 per month.
Step five: Over pay bills
Another easy trick is to overpay your minimum repayment every month which will pay down the debt more quickly.
It’s also important that you stop building up more debt and learn to live within your means.
Essentially, if you can’t afford to buy something then don’t do it.
if you are looking for impartial debt advice then it will be worthwhile speaking with the friendly debt advisers at Scotland’s Trust Deed who have the experience to help and can offer advice about a trust deed, which is only available to people living in Scotland to repay debt, and also on the debt arrangement scheme and sequestration, which is another name for bankruptcy.
The Scotland’s Trust Deed’s debt advisers are available to speak with every day and there’s an online debt test to see what potential solutions are available for people living in Scotland and struggling with their debts.