How to Cut Bills and Eliminate Debt Today
Reduce Debt, Save Money and Resolve Financial Problems
Nov 3, 2008
It is important to find ways to cut bills, save money and eliminate debt in preparation for those unexpected life events. The Citizens Advice Bureau (CAB) said that it received 1.93 million enquiries with regard to financial problems in 2008/2009. This represents an increase of 11% compared to 2007/2008. Their average client owes £16,971. The CAB stated that it would take up to 93 years to eliminate debt at a rate that was affordable.
Eliminate Debt as Quickly as Possible
Seek to eliminate debt as quickly and efficiently as possible. The Consumer Credit Act 1974 gives all borrowers of up to £25,000 the right to reduce the amount they owe at any time, without penalty. Work over-time, sell items on eBay, cut bills by using an online comparison service and use personal savings to clear debt. Always clear secured loans and high APR credit card debt first.
Resolve Financial Problems by Challenging Unlawful Loan Agreements
Not all personal loans and credit card debt is lawful. If a credit agreement fails to comply with the prescribed terms of the Consumer Credit Act 1974 it cannot be enforced in a court of law. An unlawful loan agreement will serve to eliminate debt and alleviate money problems. It is also possible to challenge mortgage agreements to see if compensation should be awarded. For example, where a mortgage broker has sold a bad credit mortgage to a homeowner with perfect credit.
Escape Financial Problems with a Debt Solution
When financial problems become an issue, action needs to be taken to eliminate debt. The most important decision to be made is which debt solution to choose. For example, if a consumer owes £50,000, choosing a Debt Management Plan is likely to be the wrong option. An Individual Voluntary Arrangement (IVA) or filing for bankruptcy may be more appropriate.
Eliminate Debt before Saving Money in a Current Account
If both savings and high APR credit card debt exist, use personal savings to eliminate debt. It is not sound financial management to have £10,000 in a current account earning 0.1% interest and be paying a £15,000 loan at 8.9%. It is possible to save money equivalent to an extra month of salary.
Ways to Cut Bills and Reduce Spending
It is easier to cut bills than to earn extra cash, particularly in a bad economy. Finding ways to save money will help someone to eliminate debt quickly and efficiently.
- Look for 2-for-1 deals and bargains. It is possible to save money, especially on short life foods.
- Take a packed lunch to work to cut bills. It is possible to save £60-100 pcm.
- Purchase clothes at opposite seasons. Buying a winter coat when the sun is shining will be a lot cheaper than when snow is falling.
- If travelling to work by rail, try buy tickets at the last minute via phone. Many tickets are reserved for telephone sale and are made available at substantial discount.
Employing several of the above strategies will help a consumer to cut bills. If financial problems exist, use personal savings to eliminate debt. If this isn't an option, try to save money at the supermarket, use online price checkers, sell items on eBay and take a packed lunch to work.
Source
Credit Action - June 2009
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