Dealing with Debt

There are numerous ways of dealing with debt and one of these is a debt management plan. It is not applicable to every situation, but for those whom it is (in fact a very high percentage of debt problems) it can provide a straight forward solution to get out of debt.

A debt management plan is essentially a way of bringing expenditure and income into a balance that will allow you sufficient additional cash to, over a definable period of time, extricate yourself from debt.

Theoretically it is possible to manage your own debts without help from external agencies, but in reality it is almost impossible to achieve this by yourself. Those guys who phone you up demanding that you make repayments over and beyond what you can reasonably afford know only too well what they are doing. Forcing you to pay back money that you have not got is how they themselves make a living.

Using a debt manager can circumvent these difficulties. Debt management agencies know exactly how to deal with these debt collectors. Dealing with them is their day to day activity.

Debt managers will negotiate directly with your lenders to obtain lower repayments for you and to possibly freeze interest and other charges. They are particularly applicable if you have found yourself in a situation caused by external factors, such as redundancy, which you anticipate will improve in the future, possibly in the next year or so.

Of course there are some downsides. Although your credit rating would not be affected as much if you had been declared insolvent, it will be affected. Your monthly outgoings will be reduced, but the total sum you repay will be increased. Also the debt management organisations are not charities – they need to pay their staff so they need to charge fair and reasonable fees – but these fees are taken into account when determining how much of your debt you can afford to repay each month.

On the other hand the upsides are huge and, depending on your circumstances, it could be by far the best option for you. Don’t delay – talk to the experts.

Debt Management – How to Solve Debt Problems by IVA

So you are drowning in debt and are worried sick. You fear you may loose your home; your creditors are threatening you. You are falling behind on your payments and are contemplating declaring bankruptcy. In the UK there is a government-backed solution. It is called an Individual Voluntary Arrangement, better known as an IVA. If your debts exceed fifteen thousand pounds you can apply for an IVA. An Insolvency Practitioner will help you solve your debt problems and you may not loose everything. In fact you may not loose your most important investment, which is your home. Also you will be saved from the embarrassment of having your bankruptcy declared in the newspapers. Also you might manage to get up 75% of your debt written off. If 75% of the creditors agree to the arrangement offered by you insolvency practitioner, the rest will have to agree. You can ask your insolvency practitioner not to mention your mortgage. Remember an IVA is not a quick fix solution to your debt problem. But in the UK it might be one of the best ways of paying off your debts, without loosing face. If you are feeling unsure about it, talk to an insolvency practitioner in your area.