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How to Become Debt Free in the UK

Thursday, February 26, 2009
Related Tags: uk | debts | bankruptcy | free | insolvency.gov.uk
 

Instructions

  • Step 1:
    Record a budget that details every expenditure and income that you bring in. Be sure to include taxation in your projections, most notably the Value Added Tax (VAT) added to all retail purchases in the UK.
  • Step 2:
    Determine what items in the budget are non-essential. Try to whittle them down as quickly as you can to free up money to spend on debt relief.
  • Step 3:
    The UK has many free, non-profit debt advice services available. Some of them are linked below in the references. Contact a specialist if you are uncertain about your legal responsibilities to your creditors or need help figuring out a way to pay back debts.
  • Step 4:
    Pay back high-interest debt first and lower-interest debts later on. Credit consolidation services promote their services aggressively in the UK, but they often charge high fees and may end up costing the debtor much more than if they had solved their debt issues alone and with free counseling assistance.
  • Step 5:
    Consider bankruptcy to discharge debts. Bankruptcy does not eliminate all debts; rather, it is a legally organized settling of all debts with creditors. The Insolvency Service, run by the UK government, is a free educational resource detailing the bankruptcy process in plain language. You can access it through the reference link below.

Resources

Photo/Video Credit

René Ehrhardt, Flickr

How to Become Debt Free in the UK Provided by eHow.com
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