There are many ways to get into debt and, thankfully, there are also many ways to get out of it. Whether you go it alone or enlist the help of a debt counseling agency to get some debt advice, there are different types of debt help to get you out of trouble. The most common solutions to debt given by debt advice professionals are listed below.

Remortgaging

If you find yourself seriously in debt and you own a home, a debt advice professional may recommend that you remortgage to release the equity in your home and to use the money from this to pay off your debts. This can be a wise option in many cases as the interest rates on mortgages are usually lower than any other kind of debt.

Getting a remortgage involves ending your current mortgage and starting a new one. This often involves changing lenders, but this can often work to your advantage as you may be able to find a better deal with a new lender. However, there are a number of factors that a debt advice professional will help you to keep in mind when exploring this option. If you are paying a fixed rate you may be liable for steep fines, or redemption charges, to cancel your current arrangement.

Also, if you are in a position to change, make sure your new deal and/or lender is flexible and that you will have freedom to remortgage in the future if you choose so. In addition, inquire whether your new lender offers any perks for new customers. Many will cover the costs of the valuation of your home and legal fees. Get the best deal you can!

When considering taking a remortgage loan to pay off your debts, be sure to seek debt advice before committing to anything. A debt advice professional will help you keep things clear and will help you weigh the pros and cons of taking a remortgage loan to repay your outstanding debts.

Consolidate Your Debts

Another option given by debt advice specialists, which offers some similar benefits to remortgaging, is to consolidate your debts into one loan. Basically, this involves tallying the sum of your debts and taking a term loan out for that amount. Again, the interest rate will most likely be much lower than your current debts. Use this money to clear your debts and then begin repaying the loan with one easy repayment each month.

However, because you are already struggling financially, banks will be reluctant to give you a loan. You will have to offer up some kind of security against the loan, such as equity on your home if you already have a mortgage.

When considering a consolidation loan, as when considering a remortgage to repay your debts, it is best to get some debt advice before proceeding with any agreements. A debt advice specialist will help you put your decision into perspective so you can see if it's really the best option for you.

Debt Counseling and DMPs

Debt counseling is an increasingly popular option given by debt advice specialists to people looking for help in getting their finances in order. These services will help you make a total of your incomings and your outgoings, calculate your disposable income and come up with a realistic monthly plan for you to pay off your debts. Debt advice specialists will also help you make a budget and keep to it. All of this usually comes in the form of a debt management plan (DMP). DMPs are recognised by many financial institutions and can be very helpful when entering into negotiations with banks. Although they may not save you a huge amount of money, these services are invaluable when it comes to organising your finances.

IVAs

An IVA is a formal, legally-binding agreement between a debtor and their creditors to settle debts within a reasonable timescale, usually five years.

IVAs are becoming increasingly popular among debtors in Britain who are struggling to keep up with repayments. They offer a very useful alternative to bankruptcy, and they are popular among creditors because they generally stand to recoup more of their money than they would if you declare bankruptcy.

With the help of an insolvency practitioner, you submit a proposal to your creditors outlining the reasons for your financial problems, how much you can repay monthly and other details. If accepted, you make monthly payments and all outstanding debts are written off at the end of the agreed term. Debtors have been known to have as much as 75 percent of debts written off using this method.

While an IVA sounds great, it's best to discuss all available options with a debt advice specialist before committing to any one plan of action to reduce your debt.

Bankruptcy

Bankruptcy is a word that strikes fear into the hearts of many, and it is often seen as a last resort. Debt advice resources will tell you to very carefully consider all other options before resorting to bankruptcy. However, a bankruptcy will free a debtor from pressures from creditors, and it will ensure all assets are divided equally among creditors.

Bankruptcy has a lot of stigma attached to it as it is publicised, and it leads to a poor credit rating for six years.

As seen above there are many types of debt advice available to you. Which one you choose should depend entirely on you circumstances and your preferences. Before entering in to a remortgage, a debt consolidation loan, a debt management programme, an IVA or bankruptcy, take some time to find reliable debt advice from a debt advice specialist. A debt advice specialist will be able to help you weigh all of your options so that you're sure you're making the best decision for your particular situation.