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Debt Advice

Should you have found yourself in trouble with debt, then you are not alone. In the UK alone we have more credit cards than people, which is just a small indication of a really big problem. For many getting the correct debt advice is instrumental to them finding their way out of the problem.

Since the early 1980s debt has continued to rise year on year, at a rate that is far outweighed by inflation. So what does this mean for consumer Britain and what can we do to ensure that we remain on top of our finances?

The first stage should always be to realise that as a general rule we should not borrow. When we look towards a purchase, and we do not have the money, then we should be saying no. But, this is not always practical, how can we spend £250,000 on home in London when we just started working 4 years ago? The answer to that question is debt finance and mortgages.

So now we have to consider when it is sensible to borrow money and when it is not. Firstly to ensure we handle debt responsibly we need to ensure that we are aware of our income as well as our expenditure. In calculating this it is important that we are realistic.

From there, consider ways that you could change your lifestyle to better meet your demands. If you are unable to calculate ways to earn more than you spend, then simply you cannot afford to take on any debt.

The best advice is that debt should only be used as a means of purchasing when you can afford it, but you do not have the liquidity to buy it. Here is an example below for you to consider.

Sandra earns £300 per week and spends £250. She would like to purchase a new fridge that will cost £500 but she has no money in her bank account. Over the course of the years she will have £2,500 she will not spend, and therefore she is able to get the fridge immediately through finance. The only reason she can do this is because she currently earns more than she spends.

However now let us consider the case of Collin who earns £400 per week but spends around £500 in bills, mortgage payments and credit cards. Collin not only cannot borrow further, but he is going to have to cut his expenditure or raise his income by more than £100 per week should he want to avoid financial crisis.

When it comes to debt advice where should I go? An independent financial advisor will be able to help you, but maybe you should contact a specific provider if you have considered how you are going to approach your debt.

If you are going to declare yourself bankrupt and you are sure of this, then you could save on costs and complete the relevant forms on your own, however this is not advisable, please remember that bankruptcy should almost always only be the last choice.

If you are in need of solid debt advice speak to a debt management consultant.

For a complete debt management solution, visit www.finance-inc.co.uk

For IVA (Individual Voluntary Arrangement) visit www.1va.co.uk