Having large amounts of debt can feel like having a black cloud follow you around, constantly reminding you of what you owe. However, just know if you are in debt, you’re not alone and have options to help you manage it.
According to a new survey, over 75% of the Americans interviewed said they felt anxious about their finances. On top of that, another 45% mentioned worrying about managing their debt.
If you are looking to get rid of your debt, keep reading this comprehensive guide to learn about the different types of debt resolutions available to give you a fresh start.
1. Claiming Bankruptcy
If you have an extremely high balance of debt and are unable to make the minimum payments, you may want to consider filing for bankruptcy. However, there are a few things to keep in mind if you do file for bankruptcy, these include:
- You need money to apply for bankruptcy
- It doesn’t wipe out all debts
- You may have to make contributions still
- Your assets can be sold
- Your credit score will take a hit
Claiming bankruptcy isn’t suitable for everybody. It can make it harder to apply for a loan, and it will become public information. Bankruptcy is considered a last resort and shouldn’t be used unless you are unable to make any minimum payments.
2. Individual Voluntary Arrangement
Instead of claiming bankruptcy and ruining your credit, you can agree to pay off your debt by making payments. With an individual voluntary arrangement, a third party will arrange for you to make regular payments that will be divided among the creditors.
The payment you make will be based on the amount you can afford to. An individual voluntary arrangement can be a great idea for individuals that want to avoid bankruptcy and still manage their debt. Learn more about how an individual voluntary arrangement can work for you by visiting becomedebtfree.co.uk.
3. Debt Relief Order
Another option for getting out of debt and finally becoming financially free is to obtain a debt relief order. A debt relief order is an easy, effective debt solution for those looking to get out of debt introduced in 2009. It’s designed to help individuals with few assets pay off their debt.
However, to be eligible for a debt relief order, you must meet certain criteria, including an inexpensive car and few assets.
4. Administrative Order
There are several options for relieving your debt from things like your credit card or a hospital bill. If you have a low amount of debt, you may be eligible for an administrative order.
An administrative order involves a court order dictating the amount of debt you owe and how much you can make in payments each month.
Get Help With Your Debt Resolutions
When it comes to large amounts of debt, it’s best to get a professional opinion on how the best way to proceed. There are several different ways you can go about it that can have lasting impacts on your financial status. The most important thing you can do is develop a plan and determine how you’re going to get it lowered. If you wait any longer, it’s just going to make the situation worse.
For more information on debt resolutions and other ways of improving your financial situation, check out the rest of our blog!