If you are struggling with debt in the UK then you are probably wondering how to get debt free all the time. This article gives you advice, help and debt information so you can restructure and pay debt, and eventually be free of debt.

Struggling with debt that you cannot pay is always difficult and there are rarely easy solutions. However one of the worst things you can do is simply ignore the problem and hope that it goes away.

Debt problems do not usually go away by themselves. The good news however is that there are some simple steps that you can take which will get you on the road to dealing with your debt problem and becoming debt free.

Understand your income and living expenses

If you never seem to have enough money and are always at the limit of your overdraft and credit cards or even going over them the first step to getting back in control is to understand your current financial position.

Take a snap shot of your finances by making three lists. First list all of your income after tax and other deductions. Then list all of your monthly living expenses. These include things like rent or mortgage, bills, housekeeping and travel but not regular debt repayments. Lastly list all of your debts and the amount you should pay to each every month.

If you take your total income and deduct your total living expenses (but not debt payments yet) you are left with what is known as disposable income. This is the amount you can afford to pay towards your debts each month. If this amount is less than what you need to pay, you have a debt problem.

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Make savings where you can

If your disposable income is not enough to cover your debt repayments the first thing you need to do is review your living expenses list and see whether you can cut back in any areas.

There are a number of expenses that will be fixed (in the short to medium term at least) such as your rent or mortgage and travel costs. However you might find that you are able to cut back on other variable expenses such as you mobile phone bill, clothing and entertainment expenses.

Of course you should also see whether it might be possible to improve your income. However it is extremely important to be realistic about being able to improve your income. For most people this is simply is not possible especially in the short term.

As such if you know that your income is not going to change and you feel that you are unable to make any meaningful savings in the short term the next step to getting debt free is to use a debt management solution.

Manage your budget

Whichever solution you chose to solve your debt problem one of the most important things to remember is that in order to get debt free you will have to become much better at managing your budget.

Once you have established your reasonable living expenses budget you must make sure that you plan your spending and do not spend more than your budget allows. Only then will you be able to stick to your agreed debt repayments and you will be on the way to becoming debt free.

This practise of sticking to your budget will also be a valuable skill for the future. Once you are debt free you will still need to continue to stick to your budget to make sure that you do not get into a debt problem again. Instead this practise will allow you to start saving for the future.

Use a Debt Management Plan

One of the most common debt management solutions is known as a Debt Management Plan (DMP). A DMP is simply the name given to the process of negotiating reduced payments with your creditors so you can lower your payments to fit the amount you can afford – your disposable income.

If you have never considered it in the past, the idea that the banks and other people you owe money to might be willing to reduce the payments they accept from you probably seems unrealistic.

However the reality is that you cannot make payments towards your debts that you simply cannot afford. You can prove to your creditors that this is the case by showing them your income and expenditure lists. When they see that you cannot reasonably make any further savings to your expenditures, they will be willing to agree reduced payments.

Of course this will only work with unsecured debts like credit cards and loans. You cannot negotiate reductions in secured loans such as a mortgage in this way. Also if you do not like the idea of trying to negotiate reduced debt payments yourself, then you could consider using a professional company do help you set up and manage a DMP.

Consider an IVA

Before you decide to use a DMP you should also consider one of the major downsides to the solution. This is that you must still repay all the debt that you owe. If you are making reduced payments each month this could mean that you are repaying your debts for a very long time.

If you want to be free of your debt more quickly you should also consider the possibility of using one of the more formal debt solutions. In England, Wales & Northern Ireland you have the option of starting either an Individual Voluntary Arrangement (IVA). In Scotland your options are slightly different.

One of the major advantages of this solution is that in most cases a significant amount of your unsecured debt will be written off or forgiven completely. You will therefore be debt free in a far fast time than if you use the DMP solution.

However it is important to remember that the arrangement has particular advantages and disadvantages and will not be right for everyone. Therefore expert advice must be sort before deciding to use one.