How to set up a Debt Payment Plan

You have a debt to pay, yet you have absolutely no idea how to do so. Well, read on—here is a simple step by step plan to pay setting up a debt payment plan.

First off, you should consider how much you owe, and then organize it. Make calls to your bank and make sure that you have them all listed off.

The next step would be to list your debts off in the order in which you wish to settle first. Many debt management consultants suggest that you should go from the smallest to the largest debts, yet the best idea would probably be to take a Saturday and do some of your own calculations.

Calculate how much you are willing to pay per month. If you have some minor debts, then you should set aside a reasonable amount, while saving around 10-20% to spend for yourself. If you have major debts, set aside everything you can spare, while saving approximately 5-10% to make up for unexpected payments.

Do your calculations. Calculate how long it would take to pay back each of the debts individually, at the rate in which you are making money. Average it out to per month, and calculate the opportunity cost of paying back each of the debts. An important thing to note here is that if your earnings are lower than your minimum monthly debt payments, then you should opt for an IVA or a bankruptcy.

List off your debts in the order of opportunity cost, going from the lowest to the highest.

The last step would be to start paying off your debts in the order that you have listed. While doing so, make sure to any extra money that come along, and make some extra payments to minimize your losses.

With this simple debt payment plan, you would be able to pay back your debts in an orderly fashion.

For more information on our debt payment plan IVA solutions or other debt help visit our website to see what types of IVA agreement we have to offer.