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HomeAssets & savings

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.

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.

If you need debt advice, please call the MABS helpline now on 0761 07 2000. They're open Monday to Friday from 9am to 8pm.

Assets and insolvency

Assets are especially important if you’re considering insolvency which is why it's important to get debt advice 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.

If you need further advice about debt, savings and assets, please call the MABS helpline now on 0761 07 2000. They're open Monday to Friday from 9am to 8pm.

Foundation for Credit Counselling (trading as StepChange Debt Charity) is a company limited by guarantee registered in England and Wales (Company No: 2757055) and a charity registered in Ireland (Registered Charity No: 20104887). Registered office: Wade House, Merrion Centre, Leeds, LS2 8NG, United Kingdom.
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StepChange Debt Charity 2021