Debt Advice

There are, in general, four main methods of debt solution for those who need it in the UK and these methods are usually tailored to the various needs of the particular person and their financial problems. When people are in debt, they usually look for debt advice that can help them get out of the difficult financial situation they’ve found themselves in. There are different ways of doing this and below is a list of the main debt solutions used and who they’re best suited to; IVAs For thousands of UK residents every year, debt advice results in them taking out an Individual Voluntary Arrangement or IVA. In recent times, there has been a lot of negative press about IVAs and the amount that are being entered into which has in turn raised questions about the quality and credibility of the advice being given by companies. An IVA usually lasts for five years and involves paying a pre-agreed monthly sum for the benefit of your creditors. At the end of your IVA, any outstanding debt included in it will be written off and you’ll then be debt free. Debt consolidation This is another option that is offered to people who have a lot of unsecured debts and who are also homeowners. Debt consolidation loans are popular as they can bring all your unsecured debt together into one lower and affordable monthly payment that will be secured against your property. This should help make your debts more manageable; however, it’s worth remembering that everyone’s individual circumstances are different so make sure that this will be the best option for you. Debt management When you decide to get some advice on how to deal with your debts, debt management may be a very viable option for you to consider. This informal method of dealing with your debts allows you to pay one lower monthly payment to a company who manages your debt. To make things even easier for you to manage, the company will then distribute this information to your creditors on your behalf. In order for you to consider your financial options carefully, the pros and the cons of all debt advice should always be pointed out to you. In the case of debt management, it’s likely that your creditors will continue to add interest to the amount you’re due and they’re entitled to go back on the informal agreement at any time and demand the full monthly repayment. Bankruptcy This is usually only offered as debt advice when there are no other options to consider due to the far reaching implications of bankruptcy. Every year in the UK there are people who declare themselves bankrupt without getting proper debt advice first and end up losing their homes and jobs because of it. Another of the main bankruptcy disadvantages is that details of your financial situation will be made public so if this is something you’d prefer to remain private, it is worth seeking professional debt advice as soon as possible.

Many UK residents each year seek out debt advice which results in them taking out an IVA. At the end of an IVA, any outstanding debt will be written off. In order for you to decide which debt advice would be best for you, you need to know the pros and cons of all options available to you.