Four ways you can clear your debt and those you should avoid
PEOPLE struggling with debt know how stressful it can be, but there are ways you can get help to pay it off.
The cost of living crisis has been tough on everyone and more people are now facing mounting debt pressure.
It can be a scary business and you might be unsure of the best ways to clear what you owe and the ways that should be avoided.
Jonathan Chesterman from debt charity StepChange told The Sun which methods are most effective, as well as what not to do.
One of the first things you should do is seek free advice if you're worried about debt.
Jonathan said: “While it might feel daunting to open up about problem debt, reaching out for help can be the most important first step in getting your life back on track as well as preventing the debt from escalating further.
READ MORE IN MONEY
"Whether that’s talking to someone you trust or contacting a charity like StepChange, you don’t need suffer in silence, debt can happen to anyone.”
Four ways to help you clear your debt
Create a detailed budget
If you're facing tough debt, take a look at what is going in and out of your bank account every month.
From there you can gain an overview of monthly outgoings such as bills, debt payments and the amount of money left over.
Jonathan said: "There are different methods for dealing with problem debt.
Most read in Money
"An essential first step is to always create a budget listing all your income and all your priority debts and necessary expenses.
"You can then get a clear picture of your finances and see whether you have any money leftover for repaying other debts."
The more detailed you can be, the better. If you know exactly what dates payment are due to come out your bank then you can be more prepared.
Always address your ‘priority’ debts first
Once you know your money you have to play with each month from your budget - it's time to prioritise the most important outgoings.
These are what Jonathan refers to as "priority debts" and refer to bills or other important payments you have fallen behind on.
He said: "Your priority debts need to be paid before any others, these are payments like rent, mortgage, energy bills, child maintenance, council tax, among others."
He warned that the consequences of not paying them can be more serious than with other debts.
Pay toward your most expensive debt
Another way to tackle what you owe is to focus on the priciest debt pile, after paying off the priority payments.
These might include credit cards or personal loans, so once you've paid off your priorities, move on to your most expensive debts.
Jonathan said: "Paying the most expensive debt first will be the cheapest way of clearing debt in the long term, those are the debts which have the highest interest and charges."
That means that ticking off these piles will enable you to move on to others which have less potential to rack up big interest amounts.
Get Breathing Space
"If you don’t have enough in your budget to cover the previous steps, don’t worry," Jonathan explained.
Instead, you might want to consider getting free, independent advice from an organisation like StepChange for example.
Depending on how much and what type of debt you have, you may be able to get additional help.
The Breathing Space scheme freezes your interest and any charges or debt collection activity your creditors might take for 60 days.
This could give you valuable time to find an effective and long-term solution for dealing with your debts and help you move forward.
For more information on the scheme head over to the MoneyHelper website.
Two ways you should avoid trying to clear your debt
Be wary of using more credit
One thing you should be cautious of taking on more debt to repay what you already owe.
This could stick you in a cycle of borrowing that is difficult to break free from.
Jonathan said: "Be wary of borrowing more money to pay off existing credit commitments.
"And always seek free advice from an FCA regulated debt advice provider before doing so to make sure you are fully aware of all the available solutions to your circumstances."
Don’t bury your head in the sand
One of the worst things you can do when faced with problem debt is to ignore it.
If you act like the issue doesn't exist, it will likely only get worse.
Jonathan recommends speaking to someone about the struggles you're facing.
Speaking to someone you trust or going to a charity can really help.
Or, talking to your creditor can help you better plan out how you'll be expected to pay off your debts, but also when you can aim to pay them off.
What to do if you're struggling with debt
If you are looking for general help and advice to help you manage your debt, there are a number of charities and organisations that may be able to help:
You can contact on 0808 808 4000.
An adviser will ask you about your income and spending, so try and have as much information to hand as possible when you call.
They will help you work out what you can afford to repay, and help you decide on the best solution for your debt.
Self-employed workers can also get help through .
can be contacted on 0800 138 1111.
It can talk you through different options such as debt management plans (DMP), individual voluntary arrangements (IVA), bankruptcy, and debt relief orders (DRO) if they are appropriate.
is also available on 0808 800 9060.
It is a free and impartial service, and it can help you come up with a plan to getting on top of your debt, including which payments to prioritise and how to reduce your living costs.
The organisation's website has a on many aspects of debt, but you can contact it for more personalised help.
Local organisations may also be able to provide support in your area.
READ MORE SUN STORIES
National Debtline also recommends contacting organisation such as Mind, Samaritans and Anxiety UK if debt worries are affecting your mental health.
A benefits calculator can help you work if you might be entitled to extra cash.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]