Find Debt Help – The Solution To Your Debt Problems
Knowing when to seek debt help is a problem that many people face
. The timing of this decision can make a big impact on which solution is most appropriate for your circumstances. For example, if you bury your head in the sand and allow your debt problem to snowball out of control, a number of less severe options, such as debt management and IVA, both of which enable you to keep your home, might stop being options for you and you may be left with Bankruptcy as your only choice. Taking this important first step to get
debt help can have a positive impact on your work and home life. There are a number of ways to find the solution to your debt problems, but be careful not to get drawn in by fee-charging commercial firms as you can never be sure whether their profit is being put before your best interests.
While some of these companies charge for their services, there are charitable organisations that offer free and impartial debt advice. Remember when you make the decision to get debt help, prepare yourself for the possibility of changing your lifestyle, attitudes and mindset to make a serious commitment to solving your
debt problem.
Finding the right debt solution for your circumstances goes beyond simply working out what you can and cannot afford, the solution needs to take account of any assets you wish to protect, such as your home, as well as your professional circumstances ( some solutions can affect your employment, particularly if you deal with money or give financial advice). To find the most appropriate solution for you, speak to an advisor from a debt advice charity or your local Citizens Advice Bureau; they may recommend such options as:
Debt Management Plan (DMP)
An informal agreement between you and your creditors. This solution is often recommended in situations where it can be demonstrated that you are able to repay your debts over a reasonable length of time (typically less than 6 years) if your creditors were to stop interest and charges. Whilst most commercial organisations will charge you for this service (usually in the region of ten to fifteen percent of the amount you pay each month), there are a number of charities that will do it for free.
Debt Consolidation Loan
A well publicised form of debt relief due to large-scale daytime television advertising (you've seen the ads - one lower monthly repayment'). Whilst a consolidation loan may be appropriate in some situations, where smaller amounts of expensive credit or store card debt may would benefit from a lower interest rate, you need to be keep in mind that you are actually increasing your debt and paying it back over a longer period of time.
Individual Voluntary Arrangement (IVA)
This solution is a legally binding five year agreement between you and your creditors and if it is appropriate for your situation, it will reduce the total amount that you will pay back (typically around fifty to sixty percent) and protect your home. However, you need to bear in mind that you may be liable to pay fees if you do not complete your IVA.
Bankruptcy
This solution can clear your unsecured debt (apart from student loans), typically in twelve months (although you can be the subject of a Income Payments Agreement/Order for a further two years if your income exceeds your living costs) and should only be considered if you have no assets to protect (such as your home which you could lose in Bankruptcy if the Official Receiver believes a forced sale will unlock equity for your creditors). Although Bankruptcy allows you to make a fresh start, many feel there is still a stigma attached to it and a number of professional bodies still do not allow their members to go Bankrupt. The cost of Bankruptcy can differ from anything between 450 and 612, which includes a court fee, bankruptcy deposit and statement of affairs fee.
Debt Relief Orders
A debt relief order is only for unsecured debts under 15,000. You must also have less than 50 a month disposable income (this is the amount you have left over after essential living costs have been subtracted from household income). Any non-vehicle assets must not exceed 300 and if you do have a vehicle, the value must not exceed 1,000. Assuming you meet the criteria, you will be protected from any enforcement action by your creditors and your debts will be written off after twelve months.
Find Debt Help The Solution To Your Debt Problems
By: James Cox
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