How To Deal With A Debt Hangover
So that was Christmas, months of preparation for a few days of complete over-indulgence
. Everybody does it and while it's fun to get caught up in the festivities and fun of the Christmas period, but all good things must come to an end. Are you waking up in 2011 with a Debt Hangover?
It's fine to go overboard once in a while, spending a bit more than you should, treating yourself to the occasional treat but it's far too easy to convince yourself that you can keep doing it. You might want your family or loved ones to have a great time at Christmas but it's you that'll be left dealing with the debt for most of the next year or longer if you're not careful. That's why if you think you've over done it and reached beyond your means then you need to act quickly.
Start by researching around for any free help with debts that is on offer to you. Impartial advice is freely available and can put you on the important first steps to financial recovery.
Use a debt calculator, these are found online and are available from many debt management sites for free. Basically they are online applications that will calculate how much you should budget for each month to pay off your creditors.
After you've done your research, get in contact with a Debt Management company that will typically offer you free help with your debts, if they want to charge you for advice, avoid! A debt management company will help you decide what solution is best for you. There are many available options that can help you manage your debt, the main ones are:
DMP - Debt Management Plan
A DMP is an arrangement between you and your creditors which the debt management company will manage for you. You repay your debts at a rate you can afford and they will help remove the stress by dealing with your creditors. Companies do not typically charge fees for debt management plans.
IVA - Individual Voluntary Arrangements
An IVA could help you become debt free in 5 years as well as giving you legal protection from further interest and charges being added to your debts.
An Individual voluntary arrangement (IVA) enables you to avoid bankruptcy by making a formal agreement with creditors to pay off a percentage of your debts over a fixed period.
Bankruptcy
Simply put, bankruptcy can occur when an individual's debts are greater than his or her assets. Declaring bankruptcy means an individual is financially insolvent and can be relieved of outstanding debts. It is often considered as a last resort for people with serious and ongoing debt problems.
by: Bill Weston
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