If you found yourself in a debt and you do not know how to get out of it, then applying debt solutions would be the next best thing. Finding a practical solution to a debt should be the main priority in order to prevent dire consequences from occurring. Consider these debt solutions to your debt problems:

1. Debt consolidation. This is one good piece of debt advice that you should consider if your credit rating is good. Taking out a single secured or unsecured loan to pay for several loans will consolidate your debt and enable you to pay with only one monthly repayment at a smaller sum but longer period. If the loan is a secured loan and you used your home as collateral for the said loan then you should not default on your payments or you will be putting your home at risk.

2. Debt Management Plan. This is an informal debt repayment plan agreed upon by the creditor and debtor. Since Debt management plan is not formal then the creditor has the right to request for repayment of the full amount even if he or she has reached an agreement with the debtor.

3. IVA. This is a formal arrangement entered into by a debtor and creditor which makes the contract legally binding. Once agreed, the debtor is protected from any other action from the creditor such as changes in fees and interest rates as long as the debtor sticks to the arrangement and make the necessary payments promptly.

4. Declaring Bankruptcy. This should be as a last resort. If all of your efforts to pay the debt fails or if the creditors will not agree to the terms you wanted then you may need to declare bankruptcy. In bankruptcy, the Official Receiver will overlook your assets and part of your income. This way your debt will be slowly paid in a reasonable manner. Bank and credit cards will be closed. You need to follow some restrictions regarding financial or other actions. Bankruptcy may enable you to be debt-free and start anew on your credit rating. Those who have been bankrupt for the first time are discharged after 12 months but the restrictions apply longer than that.

The reality is that debt consolidation is a way to a means. People with millions in the bank often consolidate their outgoings to save money and make things more manageable. There is nothing wrong with wanting to pay less money and their is certainly nothing wrong with wanting to make just one or two payments per month as opposed to 10+. Debt consolidation is all about taking whatever funds you owe currently, with different lenders and merging them into one. You’ve probably consolidated your debts in the past and not even known about it if you’ve taken our a personal loan for someone and used the left over amounts from that to clear some funds off your credit card - this is debt consolidation, just in a slightly smaller form than taking out a loan to cover ALL of your debts.

It is often said that by consolidating you ruin your credit rating. This simply isn’t true. Consolidation is just a loan, nothing more. It does the same for your credit rating as the personal loan you took out for your car or home improvements. The only thing that will hurt your credit rating is when you cannot manage your 10+ payments and start missing them due to poor management or lack of funds.

What you need to do is firstly, work out what you can afford. If you have £500 spare each month and your minimum payment is £150 - don’t just pay the minimum. Pay more. All credit card companies will let you pay as much as you like, when you like, so long as it’s over the minimum. In short, pay whatever you can afford and get out of debt as quickly as possible. There is no point having that extra £350 saved in your bank account each month and earning £1 interest on it when the same amount on your credit card is costing you £50. Save when you don’t have debts, not before.

What I am saying, is know when to save and know when to clear debts. If you have the money tied up in your savings accounts to clear your credit card and still have financial security, then do it. There is no point paying your credit card hundreds of pounds each month for nothing if you can afford not to afterall. I think it all comes down to the fact that when people get credit card debt, particularly when they max it out, they almost subconsciously switch off, forget about it and just let the month to month minimum payments come out. Turing a blind eye to debt and financial problems is a huge mistake and can often lead to uncontrollable debt later.

In order to clear debts, you don’t need to earn more or win the lottery - you simply need to manage your finances with a view of getting out of debt. Don’t get me wrong, lots of people have loans etc and are more than happy to pay their month to month payment, with ease with a view of being out of debt in 3, 4 or 5 years - this is fine, if you have the income to support it, but lots of people don’t. If you’re having trouble making the month to month payments on your loads and credit cards. It might be a better idea to consider debt consolidation. By consolidating all of your existing debt into one single payment, you can often end up paying a lower amount each month than you are doing currently (which can come in handy financially) and not only that, you’re also clearing the debt itself as opposed to just paying off the interest on the total.

The fact is, getting out of debt is down to good debt management. Whether it’s taking additional loans to clear other loans, playing the balance transfer credit card game, consolidating your debts with a debt consolidation loan or even just restructuring your monthly outgoings - it all comes down to debt management. Managing your finances effectively should be a priority. You need to know specifically how much money you have coming in each month and how much is going out. This is the case for all financial elements of your life - not just debt. You need more coming in than you pay out. Once you have these figures, you need to figure out how much money you can spare to pay off your debts each month. If you can ONLY make the minimum payments, then you need to consolidate. Making the minimum payment is NOT going to get you out of debt. If you can make the minimum payment and still have a fair amount of money left over, then you need to start making additional lump sum payments off your debts, starting with the provider who is charging the most interest.

If you get debt free from one credit card or loan, each one on going will get easier and easier, quicker and quicker as each time you clear one, you have more funds each month to pay off the next.

Dealing with debt is all about good management. Take credit cards for example, if you have 3 or 4 credit cards that are maxed out at say £7,000 each (the limits don’t matter too much for the example). On this debt, each month, you’ll be paying the minimum amount of around £150 each, so around £600 total - quite a significant amount I’m sure you’ll agree. Now, from this £600, you may be under the illusion that the majority of that is going off the total debt you owe - wrong, it’s just paying the interest. So in effect, you could be paying the £600 a month for the rest of your life and still have the same amount of debt you started with.

So, how do we get around this situation? The simple answer is to consolidate. You can take out a consolidation loan, in this example for £28,000 and pay back the total amount over 6, 7 or 8 years. Now, if you did this, not only would you be paying LESS each month than the £600 you do currently, but the money you pay each month off the loan itself will be going towards the debt as opposed to just paying the interest.

So, using this example, you can pay less each month and get debt free much much quicker. Making the minimum payment on your credit cards does not clear the debt. Remember that and manage your debts more effectively.