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The Easiest Ways to Get Out of Debt

Getting out of debt can be an extremely daunting task, and when you have multiple creditors to deal with, living with debt is one of the most overwhelming circumstances you will find yourself in. Credit card debt can be the most daunting as this can carry the highest interest rate. Fortunately there are a number of straightforward ways to get out of debt, each with their own benefits and risks:

Settling your debts directly

If you’re dealing with a number of creditors and know you are unlikely to be able to pay them back in the next five years, you can try contacting them directly to negotiate settlements. This approach means your creditors may accept a balancing payment less than the full amount owed.

Debt settlement is best if you are able to come up with 30-50% of the current amount owed and can settle within 2 years or less. Negotiating directly with creditors is always a bold move however, and the negotiation process can be prolonged and stressful.

Consolidating your debts

One of the biggest stresses of debt is managing multiple repayments to different creditors. Consolidating your total debt into one place can bring much needed relief and free up your household budget. Taking out a consolidation loan means you can pay off all your outstanding debts in one go, and then only have to worry about repaying one fixed amount each month.

For a debt consolidation loan to work, you must make sure you have a steady income to meet your monthly repayment, as well as the confidence that you will not be taking on any additional large loans in future to put stress on your financial situation.  Debt consolidation loans are not the most suitable for those who have an unpredictable salary.

It’s possible to borrow from banks and private lenders. Zopa debt consolidation loans are the UK’s most affordable example of the latter.


To eliminate significant debts bankruptcy may be the final solution – though not without its difficulties. Talk with a bankruptcy adviser to help you decide whether this is the best option for you. Bankruptcy can take away the burden of stress but you will have to face other restrictions including the inability to act as a company director or borrow over £500 without making the lender aware that you are bankrupt.

Targeted Debt Reduction

Targeted debt reduction is a form of DIY debt management which revolves around making the minimum payment on all your debts except one – your target debt. You could start by targeting the largest or smallest debt first. Either way, once you have eliminated one debt in this way it will provide a huge relief and make targeting your other debts easier too, as you approach them in the same manner.

This form of debt reduction will work best if you are able to stop taking on new credit and are committed to sticking to a payment plan that you create yourself. A reliable cash flow is also important and should be able to see the complete payment of all debts within 3 years (or under). When you have a large number of debts, DIY debt reduction can work well alongside the use of a consolidation loan.


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