DebtYou know it’s time to do something about your level of debt when you can no longer afford the repayments on credit cards you own, or you are taking out payday loans on a monthly basis to make ends meet.
Overdrafts, Credit Cards and Payday Loans all contribute to debt which can soon become unmanageable and cause stress and illness while worrying about how the repayments are going to be met.
Of course, there are some steps which are obviously the first to take; can you get a part time job? Do you have items you can sell? Can you cut back on your monthly household bills?
However, if you’re in serious debt, the likelihood is you have already tried these options and it’s still not enough to pay back the debt that you have.
If it seems like there is no way out, it might be time to think about setting up a trust deed. A trust deed is a government backed scheme while deals with your creditors for you – freezing interest on repayments and calling a halt to all the red letters landing on the doorstep. Instead, you pay a monthly amount to the trust deed which is distributed fairly among your creditors according to the agreement which has been made on the trust deed, usually over 3 years.
There are lots of sources for information on trust deeds which is very helpful. Be sure to work out whether a trust deed is right for you before deciding to go ahead – a trust deed is a legally binding agreement.
Although a trust deed will affect your credit rating, it’s probably pretty awful already if you haven’t been meeting monthly payments for a while. There are some other negative points to consider as well.
Overall however, if your debt is overwhelming, this could be the way to get out of it before you lose your home or your sanity – whichever comes first.