The Most Effective Debt Management Solutions in the UK
Not only can debt put a strain on your bank balance, but the stress it causes can ultimately affect both your personal and professional life. Therefore, it’s essential you opt for a debt management solution that can remove the pressure and worry.
We’re not going to lie to you, becoming debt free is never easy, but it’s worth the inconvenience if it helps you make a fresh start. There are so many options available on the market that will suit your circumstances, from IVAs to trust deeds to debt management plans, so you can rest assured that you might be just a few steps away from taking back control of your finances.
Debt Management Plans
Debt management plans are one of the most popular debt management solutions in the UK at the moment, as all your bills will be compiled into one, meaning you will only have to pay one affordable monthly repayment, instead of several large ones. Another benefit of a debt management plan is that the debt management company will do all the hard work for you, as they’ll discuss your debt with the lenders to come up with a repayment agreement.
Individual Voluntary Agreement
An Individual Voluntary Agreement (IVA) is suitable for those who owe £12,000 or more in unsecured debt. An IVA will therefore require you to make one monthly repayment for a fixed amount of time. Once you’ve made all your repayments then the rest of the debt will be written off – so you will pay back less than you owe. However, the agreement is legally binding so failure to comply with the guidelines could result in legal action being taken against you.
Trust Deeds
Trust deeds allow a person to pay back an amount in part or full within 36 months. However, this debt solution is available to Scottish residents only. While a trust deed does not require a court process, it’s worth keeping in mind that it is a legal contract that’s a more informal and affordable alternative to sequestration.
Bankruptcy
Bankruptcy should always be a last resort. At no point should you undertake bankruptcy procedures without exploring every other avenue available. If you’re unsure whether you should declare yourself bankrupt then speak to someone at the Citizen Advice Bureau or contact experienced debt management consultants at Churchwood Finance.
While bankruptcy will write off 100% of your debts, your assets will be fairly distributed to your lenders and it will seriously affect your credit rating. You will also be required to pay fees to the court, and the sum will ultimately depend on your circumstances.
So, avoid going even further into the red and take action today with one the effective debt management solutions listed above.
We’re not going to lie to you, becoming debt free is never easy, but it’s worth the inconvenience if it helps you make a fresh start. There are so many options available on the market that will suit your circumstances, from IVAs to trust deeds to debt management plans, so you can rest assured that you might be just a few steps away from taking back control of your finances.
Debt Management Plans
Debt management plans are one of the most popular debt management solutions in the UK at the moment, as all your bills will be compiled into one, meaning you will only have to pay one affordable monthly repayment, instead of several large ones. Another benefit of a debt management plan is that the debt management company will do all the hard work for you, as they’ll discuss your debt with the lenders to come up with a repayment agreement.
Individual Voluntary Agreement
An Individual Voluntary Agreement (IVA) is suitable for those who owe £12,000 or more in unsecured debt. An IVA will therefore require you to make one monthly repayment for a fixed amount of time. Once you’ve made all your repayments then the rest of the debt will be written off – so you will pay back less than you owe. However, the agreement is legally binding so failure to comply with the guidelines could result in legal action being taken against you.
Trust Deeds
Trust deeds allow a person to pay back an amount in part or full within 36 months. However, this debt solution is available to Scottish residents only. While a trust deed does not require a court process, it’s worth keeping in mind that it is a legal contract that’s a more informal and affordable alternative to sequestration.
Bankruptcy
Bankruptcy should always be a last resort. At no point should you undertake bankruptcy procedures without exploring every other avenue available. If you’re unsure whether you should declare yourself bankrupt then speak to someone at the Citizen Advice Bureau or contact experienced debt management consultants at Churchwood Finance.
While bankruptcy will write off 100% of your debts, your assets will be fairly distributed to your lenders and it will seriously affect your credit rating. You will also be required to pay fees to the court, and the sum will ultimately depend on your circumstances.
So, avoid going even further into the red and take action today with one the effective debt management solutions listed above.
What is an Individual Voluntary Arrangement and what are the advantages and disadvantages?
An IVA is a way of getting out of debt that means that after paying your monthly payments for over 5 years (or 60 months), no matter what percentage of your debt it paid off, you will be debt free. Sound too good to be true? It's not. However it isn't as simple as it sounds to be accepted for an IVA. Here is a breakdown of what an individual voluntary arrangement is and its pros and cons.
Advantages:
Disadvantages:
The brief history of an IVA is that they were set up in 1986 by the government as an alternative to bankruptcy.
The amount you will pay monthly is assessed by a professional insolvency practitioner. If those who hold more than 75% agree to this figure, that is when the IVA will begin. For more information on IVAs call Churchwood for free on BT landlines on: 0800 2800 051
Advantages:
- They are designed for those who are in a high amount of debt (over £15,000) or more and know that there is no realistic chance of them ever being able to pay it all off. Giving these people a lifeline
- The timeframe of paying off the debt is 60 months, which is reasonable
- Once the payment period is over, creditors cannot contact you to ask for more money, all charges will completely stop
- The payment is agreed and put into one that will be fair and more affordable
- You can retain control over your assets, as well as your home
- There is no social stigma attached as you won't be publically declared bankrupt
Disadvantages:
- If you can't pay your IVA then this is deemed a fail and you are back to square one. Which means you must consult a professional debt solution company such as Churchwood Finance before you take one out, to ensure this is the right method for you.
- There are some fees and costs involved, making it more expensive than bankruptcy.
- If your pay increases during the course of the IVA, this has to be taken into account
- It will be on your credit file for 6 years
- In some cases, you may be expected to release equity from your home if you are a homeowner
The brief history of an IVA is that they were set up in 1986 by the government as an alternative to bankruptcy.
The amount you will pay monthly is assessed by a professional insolvency practitioner. If those who hold more than 75% agree to this figure, that is when the IVA will begin. For more information on IVAs call Churchwood for free on BT landlines on: 0800 2800 051