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How To Plan Your Way Out Of Debt Part 1

Almost everyone owes money - bills are a fact of life. But sometimes you may find you are swamped with debts and cannot see a way of paying them all. The worst thing you can do is to ignore your debt problem - it will not just go away.

Setting out your debts

The first stage to getting out of debt is to work out exactly how much you owe and who you owe it to. You can do this by taking a thorough look at your monthly bank statements and making a list of all your outgoings over the course of a typical month.

Then work out your income and expenditure so you know where your money's going -and how much you can afford to pay those you owe money to.

Remember, if you are honest and open to your creditors, more often than not they will be sympathetic.

Cutting your costs

You can look at your expenses to see where you can make savings. You could also try shopping around to reduce bills, or think about selling non-essential items that you own (for example, a second car).

Increasing your income

You may be in debt because you're not receiving all the money you're entitled to.
For example, it's advisable to:

• make sure you're not paying too much tax
• check whether you're entitled to tax credits
• ensure you're receiving the benefits you're entitled to
• make sure that any family and friends living with you are paying enough towards household expenses
• think about renting out a spare room to a lodger
• check whether your mortgage payments are covered by insurance

Get free financial advice

Get financial advice to see if any of your loans, insurances or mortgage payments can be reduced. Most financial advisers will offer you a free financial review to see if they can save you money.

Debt Advice

There are many ‘debt advice’ companies that offer to deal with your debts or have your debts written off. Unfortunately this is an unregulated market and therefore you must be careful. Most companies will charge you to deal with your debts. However, we recommend you consider the Consumer Credit Counselling Service.

Consumer Credit Counselling Service

Free debt advice, free of charge - The Consumer Credit Counselling Service is UK charity designed to help people who are in debt. It is completely free of charge. They will provide with template for Income and Expenditure, letters to creditors and some facts about dealing with debt.[/SIZE][/COLOR]

Article P.W Copyright 2010 Debt Advice Forum

[peoples]

Good Points. Which I'd like to emphasized,
* raise your income – by working some overtime, for example, or finding out if you’re entitled to any more benefits.
* reduce your expenditure – by giving up luxuries for a while, for instance, or by drawing up a realistic budget and sticking to it.

If you feel your debts are getting out of control, you might need to make some major lifestyle changes, if practical, such as selling your car or moving to a more modest home.