Debt Options
Debt Management Plans
A debt management plan is a managed arrangement between you and the companies you owe money to, (your debt management company will deal with all negotiations and make all the payments on your behalf). In most cases your charges and interest will be frozen (but not in all cases), and you will make one affordable payment each month. The length of your plan will depend on how much you owe and if the lenders agree to freeze interest. To qualify you will need to owe money to more than one lender, and you will need to be able to afford to make regular payment into the plan, (a debt management plan may harm your credit rating).
IVA - Individual Voluntary Arrangements
An IVA or individual voluntary arrangement is similar to a debt management plan, in as much as it is a managed payment programme. However once agreed creditors are prevented from adding any further charges or interest to your accounts by law. An IVA enables you to make a single reduced payment each month which lasts for a fixed term (usually 5 years), it also prevents your creditors from pestering you for payments or charges. To qualify you will need to owe a minimum of £15,000 to at least 5 creditors, and have at least £200 per month to pay into the IVA. The arrangement is drawn up and administered by a licensed Insolvency Practitioner (IP), (an IVA could damage your credit rating).
Debt Consolidation
A debt consolidation loan is a loan that is taken out in order to repay loans or credit/store cards that charge a higher rate of interest. Thereby reducing your monthly outgoins (quite considerably in some cases), and also setting a date when your debts will be clear. It is allways advisable to destroy any credit cards when you have paid them off, to make sure you do not get yourself in the same situation again, (this option will not damage your credit rating).
What Is Best For Me?
With so many options each with pros and cons it is diffilcult to decide which option is best for you! This is why you should complete our short form below, and take advantage of our debt help and advice. We will then call you back and help you make the right choice, it only takes two minutes to complete and could take you closer to being debt free!
