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Many people who find themselves struggling with debt are unaware of what help is available. As a result, some people end up simply trying to ignore the problem, or getting into even more debt in order to buy some time.

However, it doesn’t have to be that way. There is a lot of debt help and advice available, as well as various debt solutions designed to help people in different situations. You should be able to get help with your debts regardless of how serious your situation appears to be.

What can I do to improve my debt situation?
Before you even speak to a professional debt adviser, there are a number of things you may be able to do yourself to improve your situation.

Set up a budget
Creating a budget is easy and can save you a lot of money, yet many people never get around to creating one for their own finances.

To calculate your budget, take a look at previous months’ spending to get an idea of how much money is needed for each of your expenses (e.g. mortgage/rent, utility bills, broadband bill, etc.). Remember to factor in a rough amount for costs that may vary (e.g. shopping bills), and put slightly more aside than you think you’ll need, just to be sure.

Once you have calculated how much is needed for your essential costs, you will know exactly how much you have left to spend (or save) as you wish.

By doing this, you can have a much better view of how much money you have at any point in the month, and ensure that your non-essential spending does not exceed your disposable income.

Cut back on non-essential spending
While it may sound simple, looking at areas in which you can cut back is a good way of saving money. It might only need to be small things - packing lunches instead of buying them at work, for example - but the savings will add up over time.

It doesn’t even need to involve compromising - you may find that by shopping around, you can continue to buy many of the same items you normally buy, but more cheaply.

What debt help is available?
If you find that your own efforts cannot improve your situation enough, then it’s time to seek professional debt advice.

A debt adviser will assess your situation to help you decide on the best course of action for tackling your debts. There are a number of debt solutions designed to help with varying levels of debt.

Even if it seems you will never be able to repay your debts in full, a debt adviser may still be able to help you clear your debts - perhaps more quickly than you may think.

Debt isn’t necessarily a problem. Millions of people have mortgages, loans, overdrafts and credit card debts that aren’t the slightest threat to their financial stability. Debt becomes a problem when it becomes unmanageable…

So how can you tell a debt is becoming unmanageable? There’s no fixed amount of debt which is dangerous, as it depends on how much you earn, spend and need. However, there are certain warning signs, such as paying your household bills with a credit card because you need to (not just because it’s convenient), or never being able to pay off your credit card debt, or putting off paying bills until you receive the final demand.

Taking action
Once you’ve spotted a potential problem, the important thing is to take action sooner, rather than later. Start by getting some professional debt advice and seeing what the adviser recommends.

Once you’ve explained your situation, they’ll take a look at the figures and help you decide if you can bring your finances back in line by making a few cutbacks, or if you need to go further. They may suggest a professional debt solution, such as debt consolidation or an IVA (Individual Voluntary Arrangement).

Debt consolidation
If you’re paying off multiple unsecured debts, you may be able to pay them all off with one large loan known as a debt consolidation loan. This can come with a lower interest rate than the loans you’re paying off, especially if they’re high-interest debts such as credit cards.

Debt consolidation also gives you a chance to re-think the way you’re repaying your debt – for example, if you’re worried about keeping up with your monthly payments, you could arrange to repay the consolidation loan quite slowly, reducing the amount of each payment. Of course, repaying the debt more slowly would probably mean it costs more in total, as it would spend longer accruing interest.

IVA
If you owe around £15,000 in unsecured debts or more and there’s simply no way you can keep up with your debt repayments, an IVA could be the answer.

It’s an agreement between you and your creditors: basically, you agree to make regular, fixed payments (as much as you can afford after taking your essential living costs into account) for the duration of the IVA. In return, your creditors agree to accept those lower payments, not to take any (further) legal action against you, and to write off any outstanding debt at the end of the IVA. In most cases, this is five years.

An IVA will, however, affect your ability to get further credit for a period of six years. And before it can start, it must be approved by creditors who collectively ‘own’ 75% of your debt.

Trying to repay problem debts can be a daunting task. More people than you may think face the dilemma of how they can afford all of their commitments each month - and many people are left wondering how they are ever going to get out of the situation.

That’s why debt help is so important. An expert debt adviser can offer guidance on how to improve your situation - whether it’s simple advice, or a more specific debt solution.

How a debt adviser can help

When you first call a debt adviser, they will discuss your situation in confidence in order to establish the best course of action for your circumstances. It may be that a few words of advice are enough to help; it may be that you simply need a bit of help with budgeting and getting your finances in order; or, if your circumstances are a little more serious, you may benefit from a more specific debt solution.

There are a number of debt solutions available to suit a range of financial circumstances - and choosing the right one could make it much easier for you to repay your debts.

Debt consolidation loan

A debt consolidation loan allows you to ‘consolidate’ several debts into one with a new loan, which can make managing your finances more simple.

You will repay your debt consolidation loan to your new lender in single monthly instalments. It’s often possible to reduce your monthly outgoings by spreading repayments out over a longer period than your original debts - but be aware that this could also mean paying interest for longer, and therefore paying more than if you had chosen a shorter repayment period.

However, you could still save money on interest overall if the APR on your original debt is higher than that on your debt consolidation loan. And even if you don’t save money, some people are happy to pay a little more overall if it means lower and more manageable monthly payments.

Before you take out a debt consolidation loan, you should be sure that you will be able to continue making the payments for the duration of the agreement. It is still a form of debt, and failing to make payments carries the same consequences as with any other debts. You should also be sure you will not be tempted to spend the money you have repaid towards your debts (e.g. on a credit card balance), since this will result in even more debt to pay back.

Debt management plan

A debt management plan is an agreement between you and your creditors for lower monthly payments, based on how much you can afford each month.

While you can arrange a debt management plan by yourself, this requires a lot of negotiation with your creditors. For this reason, some people prefer the convenience of a professional debt management company, who can negotiate with creditors on your behalf.

As well as negotiating for lower monthly payments, it may also be possible to get a freeze on interest and other charges, which can stop your debt from growing.

IVA (Individual Voluntary Arrangement)

An IVA is an alternative to bankruptcy in which you agree to repay a set percentage of your debts to your lenders, based on how much you can afford on a monthly basis, and the remaining debt is written off. It is typically only used for more serious levels of debt.

You will work with an Insolvency Practitioner to put together an IVA proposal, which will then be sent to your creditors. This must be approved by creditors accounting for 75% of your total debt for the IVA to go ahead.

If the proposal is approved, you will begin making regular monthly payments to your Insolvency Practitioner, who will divide the money amongst your creditors. On successful completion of the IVA (usually after five years), your remaining debt will be written off.

If you do decide on an IVA, be aware that if you are a homeowner you may have to release some of the equity in your home in the 54^th month (half way through the final year), and you may also be required to contribute the majority of any rise in income while the IVA is in place.

Finding the right debt solution for your situation can make a big difference to your ability to repay your debts, as well as how long it takes you to repay them.

There are a number of solutions for people who find themselves struggling with their debt, all of which are more suitable for certain situations or certain levels of debt.

What debt solutions are available?

Debt consolidation loan

A debt consolidation loan is a loan taken out to pay off your existing debts. One advantage of this is that it can simplify your finances by turning several debts into just one - meaning you only have to deal with one creditor (and one repayment) each month.

It’s also possible to reduce your monthly payments with your debt consolidation loan, by making repayments over a longer period of time than your original debts. However, this means you may pay more interest than you would have on a shorter repayment term.

That said, it is sometimes possible to reduce the amount of interest you pay. If your debt consolidation loan carries a lower APR than the cumulative APR on your original debts, you are likely to pay less interest overall.

Although your payments may be reduced, you should still ensure that you can afford your repayments. If you don’t think you will be able to, then another debt solution may be more suitable.

Debt management plan

A debt management plan is an informal arrangement between you and your creditors, agreeing on an alternative repayment plan to enable you to pay back your debts more easily.

It’s possible to arrange a debt management plan on your own, but many people prefer the convenience and experience of a professional debt management company.

IVA (Individual Voluntary Arrangement)

An IVA is a legally-binding agreement between you and your creditors in which you will agree to pay off a percentage of your debts, and have the rest written off. It is usually considered a preferable alternative to bankruptcy.

Before you start, an Insolvency Practitioner will work with you to draw up an initial proposal to your creditors. Creditors accounting for 75% of your total debts must approve this proposal for the IVA to go ahead.

Once the IVA begins, you will make regular monthly payments to your Insolvency Practitioner, who will distribute the money amongst your creditors.

The IVA will usually last for five years, and on successful completion your remaining unsecured debts will be written off.

How do I know which debt solution is right for me?

Before deciding on any debt solution, it’s a good idea to discuss your situation with a professional debt adviser. They will be able to offer expert debt advice, as well as help you decide on the type of debt solution that is most suitable for your circumstances.

You can pay off unsecured debts by getting a fresh loan. An option called unsecured debt consolidation loan allows you to avail of a new loan and merge debts that have no collateral into this account.

First, you must understand what unsecured debt is. Unsecured debt is money owed to a creditor for which there is no collateral taken. Mostly, this applies to credit cards as the credit card company trusts you to pay the balance down.

For consumers with multiple credit cards, this can sneak up on them and overwhelm their finances. All of a sudden, you find yourself paying out more than you are bringing in.

To pay of that unsecured debt, consolidation loans are a common solution. An unsecured debt consolidation loan does not lower your balance owed as in a debt negotiation settlement. Simply, all your debts are combined together and you make one payment opposed to the several you do now.

How? First you will get a lower interest rate, compared to the rates you’re paying at present. Interest rates for unsecured debt consolidation loans hover at around 7%, while credit cards can charge from 7% to a high of 30%.

You might be able to haggle with your card companies for better rates. But chances are, if you have been remiss in your obligations, the response won’t be to your liking. Which is why you should seriously consider getting a debt consolidation loan. The rates at about 7.5% are comparable to those of mortgages. However, the exact rate will depend on the APR when you applied for the loan.

Consolidation loans also call for collateral for lender security.

Unsecured debt consolidation loan is an entirely different concept. It which does not call for a collateral, making it easily within reach if you have maintained a good credit history over the years. In this situation, companies will not hesitate to offer this service because they are confident in your capability to pay.

Furthermore, an unsecured debt consolidation loan will boost your record because you can again make timely payments, plus points for your credit score.

The more you learn about unsecured debt consolidation loan, the more you will see the wisdom of this type of scheme. All of this will be eliminated by combining your unsecured debt with a consolidation loan. Consolidation of your debt may be the solution that keeps you from filing bankruptcy, which will affect your credit score for quite some time to come.

One other note, It is difficult to get an unsecured debt consolidation loan that will pay off all of your outstanding financial obligations, so choose the ones to pay off carefully. Pay off the highest interest loans first. That will free up some extra money that you can use to pay off more bills.

One other note… it is probably not the best idea to consolidate a recurring debt, but talk to your financial adviser before making a final decision.

Today’s featured RSS feeds are from Debt Advisers Direct

Regular topics include: Debt, Debt Management, Debt Consolidation and Personal Finance.

There are three feeds available:

• Debt Consolidation Articles
• Debt Consolidation News
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Additional debt consolidation info:

Christian debt consolidation programs are similar to any other debt consolidation program and the underlying essence remains the same. The ultimately goal is to make a debtor free of debt. There may be non profit Christian debt consolidation programs, whose credentials need to be judged prior to availing their services. Not all debt consolidation programs are optimized.