IVA Articles
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Debt Solutions
Getting the appropriate debt help and getting it at the right time is essential when trying to address a serious debt problem.
However, establishing which debt solution is the most suitable for your personal situation is equally important, after all, trying to solve a debt problem by starting off in the wrong direction could cost you more than just time and money.
So how does a person establish which debt solution is the correct one to follow?
Firstly, you should analise your personal debt situation, because it's only once you understand where you are financially that you'll be able to work out how to get to where you need to be.
Once you have a clear understanding of where you are you can then opt for the most appropriate debt solution available.
Principally there are 4 main debt solutions,
Consolidation Loans: These are loans where all a person's debts are brought together under one new lower payment. It is important to understand that this debt solution has a limited ability to help with a debt problem, as the size of the required loan may be too high for a person to realistically achieve. Also, taking out a consolidation loan without addressing the underlying financial problems that may be being experienced will only lead to a bigger debt problem in the future.
Debt Management Programs: Debt management programs fill a very useful requirement within the whole debt solution portfolio. They are especially helpful to people whose debt problem is short term, perhaps due to unemployment or illness. However, they do not tend to be suitable for people who are suffering from a chronic debt problem, or one where there is no end in the short term, for example when someone is suffering from a long term disability, or someone who has taken retirement. Of course it would also depend on the size of the debt problem, and how much money the person was able to afford in repayments to their creditors.
Individual Voluntary Arrangements (IVAs): This debt solution will help people who have built up debts of over £15,000 to 4 or more creditors, and find themselves unable to afford their normal monthly repayments. It is especially appropriate when someone has a large asset or property the wish to protect, or an occupation which would be put at risk should they declare themselves bankrupt. What's more - you may not have to repay your creditors the total amount you owe them.
Bankruptcy: Which is in most people's eyes the ultimate debt solution. It is worth bearing in mind not all debts are written off in bankruptcy, and you will be required to pay your creditors whatever it is deemed you can afford. It should go without saying - take professional advice before declaring yourself bankrupt, so you can be informed of exactly what to expect in the process.
If you need further information on your most appropriate debt solution call one of our debt solutions experts now on...
