UK Debt Solutions Explored
Finding yourself in debt, which you can no longer pay off, can be the start of a very long and painful road to debt relief.
Depending on your level of debt you will have a number of different options available.
Each of these debt solution options has their own pros and cons.
So what solutions are available to you: Free debt advice A number of organisations exist to help you deal with your debt problem.
These organisations include the CCCS the Debt Helpline and the Citizens Advice Bureau.
These organisations will certainly put your mind at rest plus guide you in the right direction depending on your level of debt.
Debt Consolidation Although not necessarily the best option as it doesn't actually clear your debt.
However, this solution may be right for some people.
If you have a number of debts, and each one on different interest rates, then a debt consolidation loan could help merge all these debts and pay a lower interest rate too.
This will save you money but it isn't necessarily the best way to get rid of your debt once and for all.
Debt Management This can be used for debts lower than £15,000.
This is where a debt management company can help negotiate with your creditors to bring down the amount you need to repay.
This could be used when you find that your personal finances have changed and you don't have as much disposable income to pay off creditors the full amount.
However if any of your creditors refuse to accept lower payments then it may not be possible to use a DM plan.
Another option is an IVA (Individual Voluntary Arrangement) IVA A debt advisor normally considers an IVA if your debts are over £15,000.
However some advisors may only advise this when debts are over £20,000.
Plus your debts should all be unsecured e.
g.
credit card debt, store card debt etc.
And you have 3 or more creditors and you are in full time employment with more than £200 disposable income after all your monthly expenses are paid off.
With this option you can potentially have up to 75% of your overall debt slashed and effectively you are only paying back 25p in the £.
The IVA normally runs for up to 5 years.
Bankruptcy In recent years the IVA has become a more viable option than Bankruptcy.
Becoming bankrupt may be your only option depending on whether you can pay off any of your debts or not.
Being bankrupt has lots of cons.
Once you have been made bankrupt all assets belonging to you come under the control of the Trustee, including your home.
Conclusion Whatever your level of debt and depending on how much you can afford to pay each month will depend on what debt solution is best for you.
No matter how much your debt you find yourself in, you should seek the advice from know and trusted debt help agencies first.
Don't be pressured into using unknown debt experts or those with debt help options that sound too good to be true.
Depending on your level of debt you will have a number of different options available.
Each of these debt solution options has their own pros and cons.
So what solutions are available to you: Free debt advice A number of organisations exist to help you deal with your debt problem.
These organisations include the CCCS the Debt Helpline and the Citizens Advice Bureau.
These organisations will certainly put your mind at rest plus guide you in the right direction depending on your level of debt.
Debt Consolidation Although not necessarily the best option as it doesn't actually clear your debt.
However, this solution may be right for some people.
If you have a number of debts, and each one on different interest rates, then a debt consolidation loan could help merge all these debts and pay a lower interest rate too.
This will save you money but it isn't necessarily the best way to get rid of your debt once and for all.
Debt Management This can be used for debts lower than £15,000.
This is where a debt management company can help negotiate with your creditors to bring down the amount you need to repay.
This could be used when you find that your personal finances have changed and you don't have as much disposable income to pay off creditors the full amount.
However if any of your creditors refuse to accept lower payments then it may not be possible to use a DM plan.
Another option is an IVA (Individual Voluntary Arrangement) IVA A debt advisor normally considers an IVA if your debts are over £15,000.
However some advisors may only advise this when debts are over £20,000.
Plus your debts should all be unsecured e.
g.
credit card debt, store card debt etc.
And you have 3 or more creditors and you are in full time employment with more than £200 disposable income after all your monthly expenses are paid off.
With this option you can potentially have up to 75% of your overall debt slashed and effectively you are only paying back 25p in the £.
The IVA normally runs for up to 5 years.
Bankruptcy In recent years the IVA has become a more viable option than Bankruptcy.
Becoming bankrupt may be your only option depending on whether you can pay off any of your debts or not.
Being bankrupt has lots of cons.
Once you have been made bankrupt all assets belonging to you come under the control of the Trustee, including your home.
Conclusion Whatever your level of debt and depending on how much you can afford to pay each month will depend on what debt solution is best for you.
No matter how much your debt you find yourself in, you should seek the advice from know and trusted debt help agencies first.
Don't be pressured into using unknown debt experts or those with debt help options that sound too good to be true.
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