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Getting into debt can be easy, one thing leads to another or something unexpected occurs and things spiral out of control. Before you know it, you are no longer able to afford all of your creditor commitments. Getting out of debt, on the other hand, can seem impossible.

People get into debt for all kinds of reasons – overspending, living above their means or something out of their control like redundancy, death or an addition to the family. Regardless of the reason for the debt, it is possible to get out of it and stay out.

How do I get out of debt?

Getting out of debt is possibly the easier of the two tasks…you have two options – you can either try yourself or you can speak to someone like Payplan who can offer you advice and assist you in setting up a plan.

Depending on your circumstances, the plans available may vary the length of time that it will take for you to repay your debts. A Debt Management Plan will last as long as it takes for you to repay your debts in full, while an Individual Voluntary Arrangement will generally last for five years, but can be longer.

Other options available are bankruptcy and a Debt Relief Order. Bankruptcy requires a fee to be made to your local county court and the possibility of your surplus income being paid into an Income Payments Order for up to one year before being discharged from your debts. A Debt Relief Order, which also requires a small fee, will see you discharged from your debts after 12 months.

How do I stay out of debt?

Once in a plan you will have to adapt your spending and live within your means, which many people struggle with. Trying to budget and factor in things like birthdays and Christmas, plus unexpected costs can be extremely difficult, this is why it is common to see people getting into more debt once in a plan or even missing payments.

It is therefore important that you commit yourself when trying to get out of debt and change your habits. If you are used to spending and usually pay on credit, you need to go through the old mantra “do you want it? do you need it? can you afford it?” It the answer is no to any of these, then you know not to purchase it.

Other tips to help you stay out of debt are:

  • Set up a budget and allow yourself a certain amount each month for each area. Anything that you don’t spend, put away and save.
  • Set up a contingency fund for emergencies to avoid the need for credit.
  • Set up a small savings account or separate bank account for birthdays and Christmas to help you plan for occasions.
  • Only live the way you can afford, it is not worth getting into debt to maintain a lifestyle you cannot afford.