Different levels of debt help

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Just like there are different levels of debt problems, there are different levels of debt help. The right solution to your problems with your debt will always depend on just how serious things have become, as well as things like your personal circumstances and how much you owe.

Here’s a look at the different levels of problems with debt, and the options which could be open to people in those situations.

Debt help for less serious circumstances

Debt help isn’t just for people with serious concerns about their debts. Sometimes, people with manageable debts simply want advice on the best way to keep on top of their finances.

If you’re in this situation, a debt adviser might recommend putting together a budget plan. A budget plan involves writing down all your income and outgoings to give yourself a better picture of exactly where your money is going and how you much you can safely spend on ‘luxuries’ each month.

For example, if you can see from your budget plan that your total take-home income for the month comes to £1,300 and your essential outgoings come to £900, you’ll know you have £400 left over to spend as you wish. Looking after your money in this way can make debt problems much less likely, and it can make potential problems easier to spot.

Alternatively, if you have multiple debts and your debt adviser thinks you could be managing them in a more cost-effective way, they may recommend a debt consolidation loan. This is a new loan that combines multiple debts into one, meaning just one monthly payment, one lender and one interest rate. If you wish, you may also be able to repay your debt over a longer period of time to make each payment smaller – although that would mean you pay more interest in total.

Debt help for serious debt problems

If you’re struggling with debt, your situation is likely to be entirely different. You may need to find a debt solution that can help to make your debts affordable again, such as a debt management plan or an IVA (Individual Voluntary Arrangement). Alternatively, if your problem is particularly serious, bankruptcy may be your best way of becoming debt-free.

It can be very hard to decide on the right solution for more serious problems – and all the potential solutions will come with their own pros and cons – so you should always discuss your options with an expert debt adviser before making a decision.