People in the UK are now in more debt than they ever have been. In fact, statistics show that the value of personal debt in the UK has risen to a staggering £1.424 trillion, which equates to a personal debt of £28,981 per person, or 118% of the average annual income.
Why Are We in Debt?
The reasons why we’re all in so much debt are numerous and varied. The recession hasn’t helped, of course, but if we’re being frank then it has to be said that there is an entrenched culture of overspending in the UK. And unfortunately, much of this spending is needless. One only has to take a look at the statistics which come out after Christmas to see how much of our debt we may be able to put down to frivolity.
Of course, this isn’t to say that every person with debt is in that situation due to carelessness. Debt can also arise as a result of mortgages, car payments or student loans. These types of debts are ones which most people enter into in the full knowledge that they will not be cleared in a hurry. But the crucial difference is that, unless you are completely at sea when it comes to managing your finances, mortgage, car or student loan debts are not considered to be ‘serious’ debt in the same way that credit card, store card, personal loan and overdraft debt is.
How to Get Control of Your Debts
If you’re someone who is struggling with ‘serious’ debt, of the sort outlined above, then the first thing to remember is – you’re not alone. The second thing you should try to remember is that worrying will not solve your debt problems, just as ignoring them will not make them go away. In fact, there’s only one way to completely eliminate your debts, and that’s to confront them head on.
Your first step should always be to list your debts, including the name of each creditor and how much you owe them. Totalling up your debts will give you a much better idea of how much you need to clear, and will therefore provide you with a good starting point for managing your debt the right way.
Get Help With Your Debts
If you’re worried about how to go about tackling your debts, you may wish to get help and advice from a trusted debt advisory service such as www.freshstartltd.co.uk. Not only can such a company provide you with support, they can also offer you pro-active debt management solutions, such as:
- Debt Management Plans – whereby they will contact your creditors on your behalf and amalgamate your debt into one, easy monthly payment.
- IVAs – Individual Voluntary Agreements are a type of insolvency which can be used to tackle cases of severe debt, when no other options are available. However IVAs are not the same as bankruptcy, and you will need to make low monthly payment over the course of five years, to clear the majority of your debts.
- Bankruptcy – Used only as a last resort, bankruptcy can wipe out a large portion of your debt, but it will also have a massive impact upon your credit rating.
Hey, I am Raj. I am the owner and content publisher at Financenize. I have completed my education till intermediate school and after that turn to a full-time blogger and content writer. I usually share the quality information for the readers in Financenize, which helps the small business, individuals and entrepreneurs and the information I share makes their task more manageable. I am expert in analyzing the current situation and deliver a profitable period to the extent. You can find me on various social media handles online.
