Being in a lot of debt can often seem like an inescapable situation. Before considering bankruptcy or fleeing abroad, it’s important to remember that there are still recovery options out there, even for those debtors with multiple thousands to pay and more creditors than they can name. Here are some of the main ways that you can help dig yourself out of deep debt.
Negotiate with your creditors
It’s unlikely any of your creditors will be willing to wipe the debt clean. However, rather than ignoring and angering your creditors, it could be endearing to contact them and explain your situation. To them, you may just be another late paying client. If they realise how far in debt you are and how impossible it is to pay back those debts, they may be less inclined to move to the stage of hiring bailiffs and more inclined to negotiate a better payment plan. They may agree to wipe the interest or accept payments in smaller instalments over a longer period of time. Most creditors would rather get paid something than nothing at all, and so will likely be willing to make small adjustments to fit your needs.
Get legal help
Lawyers may be able to help you negotiate with creditors and come to a better arrangement. They may also be needed in cases where creditors are being hostile or using harassing behaviour such as calling at unsocial hours or making aggressive threats. If you’re at a stage where the only option is filing for bankruptcy, a special bankruptcy lawyer may also be beneficial to hire to ensure all debts are wiped. Contact a solicitor firm if you are unsure and discuss your options.
Consider a DRO
An alternative solution to bankruptcy could be a debt relief order (DRO), although this isn’t available to everyone. It may involve assets and liabilities not exceeding a certain amount and often doesn’t extend to people trying to write off huge debts. DROs are less costly than bankruptcy and allow a more easy recovery.
Make serious cutbacks
Getting out of heavy debt will also require some cutbacks. The more serious these cutbacks are, the quicker you’ll pay off your debt. This could include selling your car so that you no longer have to pay costs such as insurance and fuel. This could include downsizing to a smaller home so that you’re paying less rent. In some cases, you may be able to make money from such cutbacks. For example, you may be able to sell a car or indeed sell a house to downsize, giving you some money to help pay off your debts. Look at these serious cutbacks as temporary – once you are out of debt you can go back to enjoying these luxuries. Whatever you do, don’t take out any more loans. You may be tempted into the idea of credit building loans or indeed consolidation loans but these may simply put you in more debt.