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Top Tips to Avoid Falling into a Debt Trap - Bank Clip

Top Tips to Avoid Falling into a Debt Trap

If you have a large amount of debt and trying to work out how to get out of it, you may want to check out some of these debt relief tips. But before that, it is important that you avoid getting into a debt trap by taking on more debts, which is why it is important that you practice strong fiscal management along with the following debt relief tips.

  • Consolidate your debt and opt for a debt management plan – It is important that you seek to consolidate all your debts so that you can get an idea of exactly how much you own. Once you have got an idea of the total sum you owe, you can now opt for a debt management plan where you along with a debt management company work out a plan towards repaying all your debts spread over a specific period.
  • Freeze your credit cards: You need to suspend your credit cards right away, at least until you have managed to settle all your debts. Given your current circumstances, you would be in no position to settle the monthly credit card bill which will incur additional interest over the time you keep the bill pending. And moreover, you may find it hard to practice sound fiscal management with credit cards, since you would be tempted to use them often which will only result in your debts increasing. So freeze those cards today and try to settle any pending credit card bills in full rather than settle for minimum payment as this will lead to higher interest being charged.
  • Review your progress often – Have monthly review meetings with your debt management practitioner, and review your progress with your family regularly. You can also use these meetings to further control your spending and even set up weekly targets.
  • Learn more about things to avoid – If a company offers you a free credit card, you can bet your last pound that there’s always a catch. So do not opt for free credit cards without checking them and remember, your debts will grow exponentially, with interest being compounded over time.
  • Tone down purchases – Remember you are just trying to get off debt, and need to assess your assets and see if you can sell something off. This is not the time to make new purchases, especially expensive ones. If you were planning to backpack through the Pyrenees for the summer, you might want to settle for viewing it on DVD; it is less expensive that way.

Being in Scotland, you can use these tips along with Scottish debt relief options to try and get some much-needed relief, you can use a trust deed calculator to establish if you qualify. Moreover, if you are not able to meet the monthly target as laid out by the debt management company, you can always opt for sequestration or bankruptcy or get a protected trust deed set up. With these tips, you should be able to manage your debts effectively and not have to worry about facing your creditors. So start implementing these tips today.