A plan to get out of Debt – Debt Advice Blog

As this is the first post at Debt Advice Blog (if you ignore the fact I previously had a blog here – see the about page), I thought I would write about what the plan is to get out of debt for the third time.

As I mention elsewhere on this blog, I have around £40,000 of debt to repay and this blog will document the journey to paying that off and becoming debt free (and then staying debt free).

What Debt Solution am I going to use to pay off my Debt?

In my case, I will be using a Debt Management Plan provided by a Debt Charity called StepChange. They are a charity based in the UK and were set up to help people like myself with their debts. They can offer a number of solutions so if you are in the UK and you are also struggling with debt, head on over to them to see how they can help you. My about page has a link to them.

What is a Debt Management Plan?

This is an informal arrangement with your creditors (the companies or people you owe money to), to repay the debts you owe. In simple terms a debt management plan works like this: –

• You take a note of how much income you have. (The money you earn or receive each week, two-weekly or monthly for example). Income could be from a job, a pension, benefits or some other source.
• You then work out your expenses, again on either a weekly, two-weekly or monthly basis.
• Your Expenses are taken away from your income leaving you with either a surplus or revealing you spend more than you receive.
• In the case where you have a surplus this can be divided up between all your creditors and an offer of repayment is made.

Note: It is important to get advice for your debts because some solutions are better than others. Make sure you go to a reputable source that has your interests at heart rather than an organisation motivated by profit.

Not all types of debts can be included in a Debt Management Plan, for example priority debts. Here is a really good explanation of what those types of debts are. If you have priority debts you should get help as soon as possible.

Why is it important to have a plan?

Like any journey, you need to know how you will get there. In my case, the vehicle of choice to the destination of debt freedom is a Debt Management Plan. Having this in place allows me to know a number of things about my debt situation: –

• How much I owe.
• How long it will take to repay my debt.
• How many debts I have.
• When I will be debt free.

Compare this to just not doing anything and ignoring the problem. Everything in this case is up in the air and there is no way of knowing what will happen.

I think the other thing is when you end up in debt, you feel a loss of control. Having a plan to move past this gives you an element of control back, allowing you to once again move forward with your life. At least this is how I feel anyway.

How will I stick to this plan?

The repayments are affordable and to be blunt, I am sick of being in this situation. I have spent most of my adult life in debt and it sucks. Only I can change my attitude towards money and debt and this time I need to because living like this is just awful.

If I look at my life then of course there are many things to be thankful for and in the grand scheme of things you only have to look around the world to see that really, despite this debt my life is much better than others and I am fortunate. It’s important not to forget this.

It would be nice not be in debt and live a simpler financial life, but I am not going to say that debt is as bad as some other things going on because to me (because everyone is different) it is not. However for others it can be (and I can understand that) and if you are reading this and thinking I am downplaying things then I am not talking about your specific situation, just mine because everyone is different.

If you are struggling with your debts and it is making you feel really bad then please get help. In the UK this could be from StepChange Debt Charity, Payplan or Citizens Advice and I would recommend you speak to them so you can start to take control again.

Thanks for reading and if you are also in debt, I wish you luck with solving your own personal situation too.