Finding a way to write off debt and become debt free is something that many people experiencing debt problems consider at some point in time. There are a number of formal and legal debt solutions that will enable you to write off your unaffordable debt and at the end of the process be debt free.
Whilst this is certainly an important consideration, and for many it may seem like the most important consideration to get free of debt, it isn’t necessarily the best way to think about resolving your debt problems. This is because there are downsides as well as upsides and you must take all your personal circumstances into account and consider all the options. This may involve taking expert debt advice.
Analyse and assess your debt first
The first thing to do before making any decisions is to detail what you owe and who you owe it to. Categorise the type of debt you have into categories such as payday loans, bank loans, HP and finance agreements, credit cards, charge cards, overdrafts and mortgages. Take a separate note of the loans that you have that are secured over a particular asset for example your mortgage will be secured against you house. Finally detail how much you pay each of your lenders.
This simple exercise will give you a clear picture of your debt situation and you may find at this stage that you then have a different view on your debt problem and may want to pursue a different solution. Some people find they are shocked at the full extent of the amount they owe others find that it isn’t as bad as they thought. This will also assist before you start looking for debt help.
Debt solutions where you can write off debt
Most people who have a debt problem just want to be debt free and move out of what is usually a highly worrying, stressful and unpleasant situation. Solving debt problems is an age old process and legal solutions are now in place to help people move out of debt in a structured and organised way where it has become a problem.
The solutions and options available where debt can be written off are referred to as insolvency solutions. Insolvency is basically when you find yourself in the situation where you are unable to repay your debts on time or you have insufficient assets to pay off your debts and financial commitments.
On the whole these solutions last for a fixed period of time after which any debt that has not been repaid is then written off.
The debt solutions that enable debt to be written off are Trust Deeds (in Scotland), IVA’s (individual voluntary arrangement) or bankruptcy.
There are conditions and implications for all of these formal debt solutions and it is important to realise that your assets will also be taken into account such as your car and your home if these are owned.
Always seek professional debt advice
Whilst you can proceed with many debt solutions on your own it is always advisable to seek professional debt advice to ensure you have all the facts and information to hand in order to make the best decision and choose the best solution for your own particular circumstances.