The New Fad In The Debt-Laden Era!
Okay, it's not all bad news and borrowing money is not always a bad thing if you can afford to do so.
Whereas we would all like to be in a position to pay cash for a car or a house, in reality this is not an option.
However, when the economy is buoyant, we're all susceptible to spending!This is especially the case when house prices rise!With our new found wealth in our properties we all merrily borrow against them and before we know it, we're struggling to pay back our mortgages and loans...
Many people have found themselves in this position, some are able to 'trade' out of it and obtain re-mortgages or consolidation loans whereas for others the strain becomes too much and they find themselves looking for a non-borrowing option as their income cannot match their monthly outgoings.
The product set here consists generally of two types of package outside of complete bankruptcy; the debt-management plan and the IVA or Individual Voluntary Arrangement.
In essence the difference is that one is a legally binding agreement whereas the other is not.
Of late, IVA's have become very 'fashionable' for both customers and providers alike, since they are the legally binding product and are more likely to provide continued revenue for the provider.
However, as more providers have cropped up, as a direct result of the ever-increasing number of people going into serious debt, margins for the providers have also been eroded.
Not only by competition amongst the providers for customers but also by pressure from regulatory bodies that believe these companies are making too much money from people who are in serious debt.
With too much choice, comes confusion and the customer is left bewildered by the different companies pitching for their business.
In many cases however, a customer may not even know that an IVA is a valid option for them to the extent that they are unaware of the product.
As a result the customer responds to the IVA companies advertising which normally focuses on 'wiping out or significantly reducing' their debt.
There are advertising rules and regulations surrounding what can and can't be said and even recently two UK companies have been cited for inappropriate advertising, forcing them to remove the advertising in question.
Whereas we would all like to be in a position to pay cash for a car or a house, in reality this is not an option.
However, when the economy is buoyant, we're all susceptible to spending!This is especially the case when house prices rise!With our new found wealth in our properties we all merrily borrow against them and before we know it, we're struggling to pay back our mortgages and loans...
Many people have found themselves in this position, some are able to 'trade' out of it and obtain re-mortgages or consolidation loans whereas for others the strain becomes too much and they find themselves looking for a non-borrowing option as their income cannot match their monthly outgoings.
The product set here consists generally of two types of package outside of complete bankruptcy; the debt-management plan and the IVA or Individual Voluntary Arrangement.
In essence the difference is that one is a legally binding agreement whereas the other is not.
Of late, IVA's have become very 'fashionable' for both customers and providers alike, since they are the legally binding product and are more likely to provide continued revenue for the provider.
However, as more providers have cropped up, as a direct result of the ever-increasing number of people going into serious debt, margins for the providers have also been eroded.
Not only by competition amongst the providers for customers but also by pressure from regulatory bodies that believe these companies are making too much money from people who are in serious debt.
With too much choice, comes confusion and the customer is left bewildered by the different companies pitching for their business.
In many cases however, a customer may not even know that an IVA is a valid option for them to the extent that they are unaware of the product.
As a result the customer responds to the IVA companies advertising which normally focuses on 'wiping out or significantly reducing' their debt.
There are advertising rules and regulations surrounding what can and can't be said and even recently two UK companies have been cited for inappropriate advertising, forcing them to remove the advertising in question.
Source...