Don’t Hide Your Debts under the Door Mat

Getting the right debt advice can sometimes be a struggle especially as there are a lot of companies out there who are more interested in getting money off you rather than actually helping your situation. Throughout the UK there are a lot of people who are in debt trouble but on the surface it can easily be covered up and they can manage their normal day-to-day lives. The problem is that they are paying too much interest on their loans that they have and there is a smarter way of dealing with this problem rather than ignoring it and simply paying what you can when you can.

debt management plan

Debt Advice

What most people do not understand is that by using an experienced debt management company you will be able to get the best advice and reduce your debts even before you have started paying them off.

The worst thing you can do is pay all of your debts individually as you will be charged extortionate amounts of interest especially if you have credit cards. Also the likelihood of you missing payments and being charged a late payment fee is very high therefore increasing your debt and your next payment. This then becomes a vicious circle if an individual does not act fast and use a debt management plan. This will help put all of your payments into one manageable monthly fee and you will not have to juggle a lot of paperwork and spend time making small payments to different companies.

A plan will help you start afresh and know that your debts are being paid off and are manageable. Also this may stop the frequent calling asking you to make more payments as a lot of credit card companies can be very aggressive in the way that they recover money.

What else is important is if you are making your monthly payments and paying off your debts then you will not risk any bailiffs coming round to recover the money through taking your possessions. This is what really puts a lot of people who are in debt in fear because the personal intrusion into their home and having their furniture and belongings put under scrutiny can be extremely stressful especially if you have a family.

For those who are seriously in debt and this means owing a sum of £10,000 or more then you may want to consider an IVA. This is not a consolidation loan but where government legislation comes into force and a percentage of up to 50% to 60% of your debt could be written off straightaway. Then monthly payments are put in place and the aim is to have you debt free within five years.

This scheme has allowed many people to keep their homes and also it has prevented them from bankruptcy. It is also important that you take up this arrangement with a reputable company that will help you throughout the process. There should be no upfront fees for the application process and only a management fee placed on your monthly payment.

These are just a few tips on how to manage your debt but most importantly you should not brush them under the doormat and forget about it as the problem will only get worse.

Bankruptcy or an IVA: Find a better option!

Consumer debts have become a grave issue in the face of UK economy. They are constantly defaulting and over burdening themselves with debt. People are frantically looking for a debt relief option to get out of debt. But surprisingly! They are unable to decide which would be a better option for their financial situation whether filing bankruptcy or an Individual Voluntary Arrangement (IVA). Through this article you will get the required information on both the programs.

Bankruptcy or an IVA

Bankruptcy or an IVA

What are the eligibility criteria for bankruptcy and an IVA?

  • If you are jobless and financially strapped then bankruptcy would be a better option. In order to file for bankruptcy you need to submit relevant documents and pay for the court charges. But remember, if you owe over £750 then you are considered to be eligible to file bankruptcy.
  • If you are considering an IVA then make sure that you have a stable income. IVA would be the right option for you if you want to avoid the hassle of bankruptcy.

Here are the main advantages and disadvantage of bankruptcy and its effect after filing:

  • With the approval of the bankruptcy filing your debts would be discharged immediately. Once the court grants your petition you would get liberated from the liability of debt
  • If you have a stable income then the court appointed trustee would design a repayment plan or you so that you pay back your creditors. This is known as income payment order. If you do not want to part with your asset then this plan would prove to be beneficial.
  • Before you file for a petition you need to go for a credit counseling session. That would help you to evaluate your financial condition and prevent you from further getting into debt.
  • You can open a new bank account after your bankruptcy is discharged but you have to undergo certain conditions. But before you apply for a new account reveal the fact that you are a bankrupt.
  • Filing bankruptcy can adversely affect your credit rating. Effect of this on your credit file would remain for six years that would create hindrance if you plan to take out a loan.
  • In case you have incurred debts through frauds, certain crimes and fines then filing bankruptcy won’t help to discharge your debt.
  • If you want to file bankruptcy again then you have file after 15 years from the date of your initial filing. If it has been five years since your recent filing then you are eligible to file a petition in the court. But you have a risk as the court may delay the discharge or dismiss the petition.

Here are the main advantages and disadvantage of an IVA and the after effects of an IVA:

  • Unlike bankruptcy you can protect your valuable assets while eliminating your debts.
  • Any individual can opt for an IVA if he has a stable income. And avoid the negative consequences of filing bankruptcy. You have five years time to pay back the owed amount that you can afford.
  • In this program you can even help to negotiate with your creditor to lower your outstanding balance.
  • On opting for IVA you get protection from the court against the creditor harassment.
  • Expenses of filing bankruptcy are higher than IVA program.
  • But if you fail to have a proper income then you are not eligible for an IVA.
  • The creditors may not agree with the proposed amount of the negotiator.
  • While you are in the IVA program you may be able to apply for an unsecured.
  • You credit report is blemished for six years.

This is a guest post by the Webmaster of Fileyourbankruptcy. Here he provides exclusive information on all types of bankruptcy.