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Assets, savings and debt

If you’re struggling to pay debts, it’s worth thinking about your assets – do you want to hang on to them, or could you live without them?

By assets we mean items of high value. This includes houses and cars, but some people may have jewellery, antiques or electrical goods which are of a high value.

Find out how to use savings to pay off debt

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1800 937 435

Using assets to reduce your debt

One option is to sell any assets you have and use the money towards your debt. This is drastic, but if you can manage without owning a house or car, you might consider this. It’s not realistic for most people though.

Instead, you could replace assets with a cheaper alternative. For example, if you have an expensive car, you could sell it and buy a cheaper one, and put the difference towards your debts or pay for other essential expenses.

You could do the same thing with mortgaged housing. If your home is too big, or you really can’t manage the mortgage payments, one option is to sell it and buy a smaller, cheaper property. This could also leave you with some extra money to use towards reducing your debts.

It might seem tempting to take out more secured borrowing against your home, but we almost always advise against this. Using an asset in this way is risky because if you later find you can’t afford the extra secured loan payments, you could end up losing your home.

Call us if you’re not sure, and our debt advisors can help. If you want to hang on to your assets, let us know and we’ll look at all the available options which don’t put your assets at risk.

Assets and insolvency

Assets are especially important if you’re considering insolvency. That’s why it’s very important to get expert debt advice from us before applying for insolvency.

Savings and debt

It’s always a good idea to keep a small amount of savings for emergencies. This can be a lifeline if you have emergency expenses, and it means you don’t need to borrow more money to cover unexpected costs.

But we don’t recommend keeping a larger pot of savings if you’re struggling to pay your debts. It’s better to use larger savings to reduce your debts.

Give us a call if you need further advice about debt, savings and assets.

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