How to get out of debt

When you’re in debt it can sometimes be hard to imagine an end to the financial stress you’re dealing with.

The recession combined with inflation rates and sky-rocketing prices on general living costs have only contributed to the nation’s financial woes – making it harder for people to manage debts alone.

At Baines & Ernst, we’re on your side and offer a range of financial solutions that are designed to help you get back in control of your money.

Three steps to getting out of debt

1. Break the silence
If you’re in debt, it’s easy to feel isolated. You must remember that there are thousands of people sharing the same experience as you – so you’re not alone.

Breaking the silence is an important part of overcoming debt. Talking to someone you trust about your financial problems could alleviate pressure – giving you the confidence to face these issues. They might even have some practical advice on how they have managed debt.

If you don’t feel comfortable talking to someone you know, our advisors will be more than happy to listen and provide information on how to deal with your money worries. We’ve helped over 100,000 escape the pressure of debt; we’re here to help you too.

2. Get a true picture of your debts
It’s a daunting task but in order to find the best solution for your situation, you must have a clear understanding of your debts.

Generally people have two types of debt – secured and unsecured.

Secured debts are your priority bills such as mortgages / rent, hire purchase loans, household bills (gas, electric, water, food, council tax), TV license, student loans etc.

Unsecured debt basically means any type of debt that is not secured against your property or assets, so this will include debts such as personal loans, store cards, credit cards, bank overdrafts and catalogue accounts. Once you have listed what you owe, add them up to calculate your unsecured debt total. It’s these types of debts that can be included in debt solutions such as a Debt Management Plan or an IVA.

If you don’t want to do this alone, you could call a member of our friendly team for a no-obligation financial review to find out what solution would be most suitable for you.

Also, if you’re interested in saving money on household bills, we could help you there too. Call today on for more details.

3. Make a ‘get out of debt’ action plan
Clearing debt is possible if you have a plan and stick to it.

If you have debts of over £2000, a Debt Management Plan is an effective form of debt consolidation because you only pay one amount every month which is then distributed between your creditors.

At Baines & Ernst, we could negotiate more affordable repayment rates with your creditors and request that they freeze interest and charges – making it easier for you to repay your creditors and work towards a future free from debt.

If you have debts of £15,000 or more, you could qualify for an IVA. This is a legally binding agreement which offers protection to you and your creditors. Interest rates and charges will be frozen, repayment rates are based around what you can realistically afford, and any remaining debts included in the IVA that still exist at the end of the agreement (normally 60 months†) will be written off. IVAs are subject to creditor agreement, which is not always guaranteed*.

If you are on a low income and are struggling to repay what you owe, you could apply for a Debt Relief Order.

There are many ways to get out of debt and at Baines & Ernst our friendly team is here to provide the advice and information you need before choosing a debt solution. Call us today on to learn more.

*For an IVA to be approved and interest and charges to be frozen it needs to be accepted by 75% of the creditors (by value). †Homeowners may be required to re-mortgage after 4 years and release available equity to pay off some or all of the debt.