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Debt Remedy Help And Advice
No matter which part of the world it is that you come from, it is very easy to fall into some sort of debt. When used wisely, debt can become an ideal way for you to pay for things that you cannot otherwise afford. On the other hand, when you rely on credit too much to make even the smallest purchases, you can easily fall into the trap of borrowing more than what you can actually afford to pay.
Personal circumstances, job loss, medical emergencies and other problems may also lead to the downgrading of your take home pay, so you will be left with bills that you cannot afford to pay. Once these debts start mounting up, you need to look for a debt remedy to get yourself out of the fix that you are currently in.
Debt Remedy Option 1: Debt Consolidation Loans
Just as it is when you are looking for any other financial product to use or debt repayments solution to go for, the suitable one to use depends on your personal circumstances. There is no one size fits all solution because each person is different. However, you can base the solution on the number of creditors that you have, how much you owe each creditor and how quickly you wish to be completely free of debt.
The first solution that you can consider is debt consolidation loan. Obviously, it is a type of loan which aims to consolidate your debts – but in what way? Let us say that you owe creditors A, B and C. With a debt consolidation loan, you will apply for loan D which you will use to pay off your debts with creditors A, B and C.
As a result, you will be left with only loan D to pay and it is bound to have a more manageable monthly payment with just one due date. Just be careful when taking on a debt consolidation loan because they are rarely the best solution and most people end up paying far more through the loan than they otherwise would have. Take care if you are encouraged to secure a loan against your home and this is a big risk to take.
Debt Remedy Option 2: Debt Management Plans
Your second option is to apply for a debt management plan. These are the most widely used and effective debt remedy and are ideal for unsecured debts of about £3,000 or more. You will look for a reputable debt management company who will put you in touch with an experienced advisor or credit counsellor to go through your situation.
The credit counsellor will assess your current financial situation. He or she will determine what amount you can afford to pay as a monthly payment for all your debts, depending on how much you owe and how many creditors you have. The credit counsellor will negotiate with your individual creditors so that a lower monthly payment can be made against your loans. In the same vein, the interest rates may also be reduced or even go back to zero until such time that you can get back on your feet financially and you can already afford to pay off the loan. Once all your creditors agree to the debt management plan, new terms and conditions will be applied to your loan which you have to stick to until you are completely debt-free.
The good thing about using debt management plans is that it is a flexible option. Should your financial circumstances change for the better or prove to be far worse in the future, you can consult the same credit counsellor so that new terms or even an entirely new debt management plan can be made.
Debt Remedy Option 3: Individual Voluntary Arrangement
Finally, there is the IVA. This is a result of the 1986 Insolvency Act in the UK which aims to help small-scale entrepreneurs who are one step close to filing for bankruptcy. Over the years, the terms of the IVA were modified to make them suitable for private individuals who are in debt as well.
With the IVA, you should meet certain conditions like having at least three creditors to whom you owe a total of £15,000. Once the IVA is in place, anything up to 75% of your debts can be written off, and it usually lasts for about five years.
Which Is The Best Debt Remedy For You?
Generally, debt consolidation loans are suitable for those who only owe a small amount to a few creditors. Debt management plans are applicable for when you are dealing with mounting debt, while the IVA is only suitable for those who are one step close to filing for bankruptcy. As you can see, no matter how dire your financial circumstances are, you can easily choose which debt remedy to go for so that you can become debt free the soonest time possible.
You can get free advice now from one of the leading UK Debt Management organisations by completing the Online Form below, or you can have a look at the list of recommendations for the most reputable UK Debt Management Companies on the homepage.
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An advisor will contact you to discuss whether a debt management plan or other option may be appropriate for your situation.
Your home may be repossessed if you do not keep up repayments on a mortgage, loan or any other debt secured on it. Think carefully before securing other debts against your home.