5 simple steps to start budgeting today

Debt can feel overwhelming, but understanding your options is the first step toward regaining control of your finances. At Norwich Community Money Advice Centre, we’re here to guide you through the process and help you make informed decisions. Here’s a breakdown of some common options for managing debt:

Understanding Debt: What Are Your Options?

1. Create a Budget and Prioritize Debts

Not all debts are equal. Start by identifying priority debts – these are the ones with serious consequences if left unpaid, such as rent, mortgage, utility bills, or council tax. A well-structured budget will help you allocate funds effectively and manage your payments.

2. Negotiate with Creditors

If you’re struggling to make payments, contact your creditors. Many are willing to set up repayment plans, reduce interest rates, or offer temporary payment breaks if you explain your circumstances.

3. Debt Consolidation

Consolidating your debts involves combining multiple debts into a single loan or repayment plan. This can simplify your finances and potentially lower your monthly payments, but it’s essential to understand the terms and any associated costs.

4. Debt Relief Options

Depending on your financial situation, you may qualify for formal debt relief options:
Debt Relief Orders (DRO): A low-cost solution for individuals with minimal assets and debts.
Individual Voluntary Arrangements (IVA): A legal agreement to pay back a portion of your debt over time.
Bankruptcy: A last-resort option that can clear debts but has significant consequences.

5. Seek Professional Advice

Managing debt can be complicated, and it’s important to seek help from professionals who can guide you. At Norwich Community Money Advice Centre, we provide free, confidential advice tailored to your situation.