Debt Management Plan May Help You Avoid Bankruptcy
If you are wondering how on earth you will be able to afford all the things that you want in the future, be it new cars, home improvements or holidays, it is hard to see how that will happen when every penny that you are earning is accounted for. You can plan for new cars and holidays but many times home improvements come as a surprise. You could have a bad storm that destroys your roof and you will need to contact a roofing professional like Jayhawk Exteriors to fix it. Having the right funds set up to pay for that is crucial.
A debt management plan is the last course of action before an individual is forced to accept bankruptcy, by saving regularly now you may be able to avoid the threat of bankruptcy. By doing a little financial planning and saving now you are in fact creating your own debt management plan. A debt management plan scrutinises your income and ‘essential’ expenditure and looks at what is left available to pay off your debts. There is huge merit in looking at your finances in this way and instead of paying off debts with the remaining money paying it into a savings account.
When you are struggling to pay for every day things, saving for the future may seem way down on your list of priorities. However, if you can put a little aside each month you will build up a fund that will mean you can pay for the unexpected expenses without having to borrow money and possibly adding to your debt. Once you begin the cycle of borrowing money from banks, loan companies or hire purchase agreements you are setting the groundwork for paying too much for your goods, and possibly not being able to make your payments and ultimately being in a bankruptcy situation.
Where to put your savings is also a big decision and getting some professional savings and debt advice could help you in the long run. If you need instant access to your money or need to be able to write cheques or use a debit card then you can put money in a current account but the interest rates for these accounts are very low. To make the most of you savings it is advisable to compare accounts from all the major banks and building societies. ISA accounts offer tax free savings but frequently access to the account is limited or payments in are regulated. It is vital that you consider what is right for you. If you are facing bankruptcy having money tied up in an account you can’t access will not help you, the money will be considered with all of your other assets if you start a bankruptcy process.
Savings are a very personal issue, only you know what you need to put money aside for, when you need to access it and how many accounts you need to save your income. Complete your research carefully, consider what you are saving the money for and consider some professional saving or debt advice to get the most out of the money that you are saving.
Post by Phil Broadhead