Ideas on getting out of Debt

Unless you’ve been in the bush for the past year without any form of communication you may have noticed there is something of crisis going on at the moment. It’s all extremely complicated, this article may help where I can’t but the long and short of it is times are hard and are getting to get a lot harder.If you are currently struggling with debt you maybe considering seeking professional assistance by way of a re-mortgage or a debt agreement. The problem is that if you are struggling with debt the current financial situation is now doubt adding even more pressure on what is not doubt a tough situation. Commonly, there are three forms of consolidation, further borrowing, informal arrangements and formal arrangements. In this post I will address how each of these is being affected by the credit crunch.

Further borrowing.

Without doubt this form of consolidation has been hit the hardest by the credit crunch and in many respects is the actual cause of the current financial crisis. Put simply, there has been too much borrowing in the forms of mortgages, loans and credit cards. When people consolidate by borrowing further they normally do so in the form of loans and re-mortgages.

In the past it was relatively easy for people with poor credit history to get out of debt by using the equity in their homes to re-mortgage and consolidate their debts. These ‘sub-prime’ mortgages are the very reason why the credit crunch has happened. Too many people are unable to repay their mortgages thus resulting in huge numbers of repossessions and banks losing millions of dollars. Clearly, the bank industry has had to react to this which they have done by not lending to so called ‘sub-prime’ borrowers. If you have a poor credit history and are a homeowner you may struggle to find lenders who will assist at this present time.

The other important factor to take into consideration is for those coming to the end of fixed rate mortgages. If your fixed rate is coming to an end it is highly like that your payments may increase as a result, try the sites below for more help.  Whereas before your home could be the key to bring about debt relief for the foreseeable future you may have to pursue other options when it comes to debt consolidation.

Informal Arrangements

Unfortunately, there are no statistics to show, however in theory there is no reason why people trying to put informal payment plans in place with their creditors should not be on the rise. If you are struggling with debt problems and do not which to declare bankruptcy or seek to obtain a Debt Agreement why not try and talk to your creditors directly? With banks losing money it would stand to reason that they would be more agreeable to this form of debt consolidation. 

Bankruptcy and Debt Agreements

The number of people declaring Bankruptcy is increasing by the month. Unfortunately, with prices increasing those who are suffering with debt problems to wave the white flag and declare bankruptcy. There are ways of avoiding bankruptcy namely through a Debt Agreement.

Debt Agreements do mean that you have to pay some of your debts back, however, they are an excellent alternative to bankruptcy and may help you beat the credit crunch.