You know how it is, you use your credit cards here and there, hit your overdraft every once in a while, see a new dress you must have now so you use the credit card again, find a cheap holiday you want to take, so you use the overdraft, and then one day you wake up and you are thousands of pounds in debt and wondering how did I get here?

You begin to struggle to make the minimum monthly payments because if you do make those payments you don’t have enough money to finish the month, which forces you to use the credit cards or overdraft even more.

It is a process of finding one’s self in debt; it rarely occurs overnight.

And it is a process of getting one’s self out of debt; and again, unless you win the lottery, it isn’t going to happen overnight.

So in looking at options/solutions of getting one’s self out of debt, there are some ways that can be quicker than others, but all with a price.

The quickest way out of debt is to go bankrupt or if you qualify, do a Debt Relief Order. In both these instances you will be relieved of the debts, meaning they will be discharged, within 12 months.

However if you were to go bankrupt and you have property or other assets, you could very well lose these in the bankruptcy. Also, while you may be discharged within 12 months, if you show the ability to make payments into the bankruptcy, meaning you have a surplus of income that exceeds £20, you could be required to pay into the bankruptcy for a period of three (3) years.

If you qualify and choose the IVA/Individual Voluntary Arrangement route, you can be debt free in five (5) years. You make the agreed upon payments into the IVA for five (5) years, the accounts are frozen to any interest and charges, and at the end of the five years any remaining balances are written off and you are debt free.

If you own any property and enter into an IVA, you can be expected to release a portion of any equity in the property in the fifth and final year.

In a Debt Management Plan or DMP, the time-frame for being out of debt varies according to the level of debt you have and the monthly payment you can afford to make. If you have property with equity, it is not an issue in a DMP as there is no equity release required. Your creditors are requested to freeze the accounts to interest and charges and allow you to make the payments you can afford until the accounts are paid in full.

While in an IVA the payments are fixed, and reviewed annually, in a DMP the monthly payments have some flexibility; the payments are based on what you can afford, but if there was a change in your situation, the payments could be adjusted accordingly.

So as you can see, barring winning the lottery, there are no real quick fixes in getting out of debt.