When it comes to dealing with debt, your approach is often determined by the amount that you earn. Even though the national unemployment rate in the UK fell to a three-year low of 7.6% between July and September, however, there is a feeling that a growing number of households are struggling to prosper given the disproportionate rise in inflation.
As multiple UK households subsequently battle with debt, it is key that citizens are able to reduce their liability without placing additional strain on their personal finances or compromising the payment of current bills and accounts. This is especially crucial if you are a home-owner, as you can ill-afford to fall behind with your mortgage repayments in the quest to cut your cumulative and outstanding debt.
Top Tips for Responsibly Reducing Debts
So how exactly should you go about managing your existing debts and repaying them in a way that does not compromise your personal financial circumstances? Consider the following ideas: –
Obtain a Free and Comprehensive Credit Report
According to knowledgefirstfinancialresp.ca, while this hardly seems like a ground-breaking solution, it is the ideal starting point for effectively managing your debts. In addition to this, it may also introduce you to a number of surprising benefits that offer significant financial relief. Imagine that you have specific debts that you consider to still be outstanding, for example, only to find upon your viewing your report that in fact these have been settled. In this instance, the simple process of gaining perspective on your overall debt liability has instantly reduced the amount that you need to spend on a monthly basis, while also providing additional peace of mind for concerned home-owners.
Prioritise your List of Debts
While this is an often used term when it comes to debt management or consolidation, it is also widely misunderstood by citizens. The idea behind this is to create a viable list of all secured and unsecured debts, ranking them in terms of their value, longevity and the potential consequence of defaulting. The mistake that most people make is entirely disregarding any unsecured debts that they perceive to be less important, so that they can focus on settling more serious liabilities. This is a flawed strategy that can lead to defaults, CCJ’s and bailiff visits, however, so you would be better served by maintaining the lines of communication with unsecured creditors and offering them a minimal repayment amount.
Using Communication as your Main Weapon in the Fight Against Debt
Occasionally, you may find that you have multiple secured debts that are equally important. In addition to your mortgage, for example, you may also own one or more family vehicles that are crucial in enabling you to work and care for your children. In this instance, it can be difficult to prioritise and manage your repayments, especially if your income or personal circumstances have recently changed. Communication is therefore your key weapon in the battle against debt, as while your circumstances may constantly change your ability to be proactive and negotiate with creditors remains unaltered. Established secured lenders and mortgage firms such as Capital Fortune also tend to be fairly flexible in their approach, meaning that you will be able to discuss your situation and in some instances negotiate repayment holidays.