How To Deal With Your Debt Through Effective Debt Management Solutions?

Life is all about the ups and downs. You are bound to face financial crises at some point in life. Constant calls from creditors and lenders can make your life miserable. However, there are ways by which you can smoothly manage your debt burden. With the help of effective debt management solutions, you can free yourself from debts and other related problems.

Here, we will provide you some important debt management solutions and advice. These debt expert debt management solutions are many and vary from temporary repayment plans to bankruptcy. However, you cannot qualify for all debt management solutions. What you qualify for will depend on your credit rating, amount of debt and also your ability to repay.

Go through these debt management solutions to pull yourself out of the financial mess you are in.

Temporary Repayment Plans

If you’re unable to repay the entire loan at once, you can try to repay a small amount to your creditors. This will show creditors that you’re willing to repay instead of simply running away.

Administration Order

An administration order is basically a repayment plan that has been ordered and arranged by the County Court. This order helps to protect you from creditors and lenders.

Paying the Concerned Creditors

You can arrange for debt repayment with your creditors and lenders to get some grip on your worsening financial condition. Chalk out a budget to see how much you can afford to repay at the moment. Contact the creditors directly and arrange for the repayments.

Debt Consolidation

Consolidating your debt is basically opting for new credit to pay back your existing credit. This new credit is then termed as a debt consolidation loan. However, debt consolidation can be quite dangerous and can potentially worsen your situation.

Debt Arrangement Scheme

It is an effective way using which you can manage your debt. It allows you to use a debt payment program. Through this program, you can repay your debt with affordable monthly installments comfortable over a longer period of time.

Debt Management Plan

Using the Debt Management Plan you can pay back your loan at an easy rate. You’re eligible to pay a reduced amount of your regular monthly payments. A third-party makes the monthly payments to the creditors on your behalf.

Debt Relief Order

A DRO or Debt Relief Order is issued by the government. It can write off your loan if you can’t repay within a stipulated time. However, you must fulfill certain criteria to be eligible for the DRO. You can opt for a DRO if your loan amount is small.

Insolvency

If you fail to pay your loan when they’re due, then it means you’re insolvent. There are several solutions for insolvency. But, to qualify for insolvency solutions your collective debt has to be more than your assets.

Individual Voluntary Arrangement

IVAs are formal agreements that you make with your lenders regarding the repayment of loans. These are legally valid agreements. Through IVA, you can repay the debt either through a lump sum or through a period of 60-72 months.

Protected Trust Deed

A trust deed is a formal agreement that you make with your creditor. It enables you to make payments at an affordable rate. A trust deed is usually valid for four years. Thereafter, the unsecured debt would be removed.

Minimal Assets Process(MAP)

If you do not have sufficient income or assets to repay your loan you can apply for bankruptcy through MAP. However, you must remember that MAP comes with many risks along with its benefits.

Releasing Equity

This is a very helpful debt management solution that you can avail if you’ve reached your retirement age. You can release the equity on your home to use the money for debt repayments.

Selling Your Assets

To repay back some amount of the debt you can consider selling some of your assets. It can be a car, a watch or any other immovable assets. You can sell only those items which you own completely.

Remortgaging

Remortgaging is basically replacing your existing house mortgage with a new one. You can go for remortgaging by choosing a different lender. Alternately, you can also change the products with the current lender. Remortgaging releases the equity of your house and reduce mortgage fees.

Surrendering Your Property

If you feel you are unable to make the mortgage payments on time, you might consider selling your house. Instead, you can look for a house that you can easily afford. Although finding new property comes with some expenses, it can save you from further debt.

Sequestration

Sequestration is nothing but another name for bankruptcy. This is one type of insolvency that allows you to write off your loan that’d take several years to be repaid. To apply for bankruptcy, you often need a certificate of sequestration. You can get this certificate from any debt advisor.

Settlement Offers

If you receive a huge amount of money then you can consider settling the debt entirely. You might have received the money by selling assets, through inheritance or gifts. Paying a lump sum amount will make the creditors write off the rest of the debt.

Bankruptcy

This is the last solution that you must resort to. If your financial condition is extremely fragile and there’s no hope of recovery, you can declare bankruptcy. With the declaration of bankruptcy, all your debt will be written off.


To sum up, the debt burden can be quite frustrating, driving you to depression. However, you can always take the help of debt management solutions. These solutions can effectively help you to systematically get out of your debt.

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