Many of us are struggling financially. My wife tries to keep a very strict handle on our financial affairs. It can be frustrating at times. Especially, when she is monitoring every transaction out of the bank and questioning each and every expenditure (however small!). But at the end of the day, it has helped keep us out of the red. Sadly, even with all the best intentions things can get out of control. This article will give 5 tips to tackle unmanageable debt. Even being more careful and cautious with spending it seems like getting into debt is an inevitable part of life at the moment. So, hopefully you will find the following useful.

Put An IVA In Place

Apparently IVAs are reshaping debt management in the UK and for good reason. It gives individuals (debtors) legal protection from their creditors. Otherwise, companies can soon apply considerable pressure when trying to get their money back. This can make people even more anxious about their financial difficulties.  It’s worth noting that if you do enter into Individual Voluntary Arrangements, it will be documented on your credit report for six years.

Get In Touch With Your Creditors

When it comes to trying to tackle unmanageable debt its very important to communicate with your creditors. If you ignore the problem the debt will not go away. Instead, your credit report will be impacted, and late interest charges and interest will pile up compounding the debt problem. Plus, its no fun for creditors to always be chasing debt, anymore than it is for you to keep having to field your calls.

Choose The Order To Pay Off Your Debts

When you tackle unmanageable debt, you need to think about the order you pay off your debts. Certain debts are considered priority debts, so you should focus on keeping on top of those first. Debt such as rent or mortgage arrears, so you still have a roof above your head. Getting behind with your council tax can lead to having to go to court and maybe even prison. Therefore, that is another debt you quickly get on top of.

Non-priority debt includes money owed from catalogue orders, credit card bills and money you have loaned from family or friends.

Also think about paying off the highest interest charging debts first to help you become a master of your own finances. This is easier to do if you do not have as many debts, otherwise your focus really needs to be on priority debts first to avoid being homeless or in jail!

Try And Earn More Or Pay Less

It will be easier to tackle unmanageable debt if you earn more or pay less. You should see if you can have a side hustle, like blogging alongside a main job or do you have anything you can sell on Vinted or eBay? Or you could rent out a room and earn up to £7,500 a year tax free. Let’s be honest £625 a month could make a huge difference to anyone’s financial situation. As we still have our boys at home it is not something I would consider right now. But perhaps in the future as we would have plenty of space. Another thing worth checking is if you are getting all the benefits available to you.

Also check if you can pay less for anything. For example, check you’re not paying too much council tax. You could see if you could get a discretionary discount which is something they have available for anyone struggling financially or on certain benefits.

Ask For Breathing Space

You can ask for breathing space if you live in either England or Wales. If awarded it grants you 60 days temporary protection to get on top of your debts. It might be enough to help those who are feeling overwhelmed at the thought of how to tackle unmanageable debt. Some people just need a little extra time. If someone is dealing with mental health issues they get an additional 30 days on top.

Conclusion

Hopefully these suggestions will give you some ideas. The main thing is not to panic when you think about how you will tackle unmanageable debt. There are lots of different approaches you can try and plenty of useful charities to approach like National Debtline and StepChange for more support and assistance.