Utilising assets Debt Solution

Summary: Utilising assets - This article looks at ways of making the most of assets in order to control debt repayments that are often accompanied by high interest charges.

The vicious circle of debt

Many people, acting honourably see debt repayments as their first priority and therefore ensure that all such repayments are made immediately after being paid. The problem arises when that doesn't leave enough money to meet all other necessary living and personal costs. It means almost certainly that we have to use more credit to survive until the next pay day when the same thing happens. We are paying out a lot of money on debts but the total owed is not reducing.

High interest rates

Even when we don't need further credit to meet living costs, some forms of credit attract extremely high interest rates. Making the minimum repayments on such debts only seems to cover the interest added the previous month. So we don't use the cards, we make every minimum repayment on time, and the debt scarcely reduces. We could end up doing this for a lifetime!

Financing debt

It is well worth understanding how much our debt is costing us, and will cost us until it's cleared. It may come as a shock. If there is any way of reducing/clearing the high interest debt we ought to seize the opportunity. This may involve considering any assets we may have.


If we are a homeowner it may be that releasing any equity we may have in order to clear high interest debts would be a very good way of utilising our assets. Even selling and downsizing may make good financial sense, if it helps us clear a serious debt issue.

Other assets

The same principle applies to our car or some other item of some value. Although it may be painful to let go of some prized asset, the benefits may far outweigh the loss. Once we are debt-free we can save for the bigger or better car, house etc. For smaller debts that can still create havoc with our finances (e.g. payday loans) even a modest return can go a long way to breaking the vicious circle of credit-dependency. So - a car boot sale (ask the family for unwanted items) may enough to clear a debt that has become a real problem.

The above is provided as information only. Iva.co.uk does not provide debt advice. You must always seek professional advice before taking any action to resolve your debts.