Friday, 10 July 2009

Help with debt management plans IVAs and bankruptcy

posted by debts.org at 04:47

Are you struggling to pay your credit card debts, your mortgage or your monthly grocery bill? With the help of a debt management plan or an IVA you can completely change your life for the better. Suffering serious debt problems is one of the most stressful things you may ever have to face, but the good news is, you don´t have to face it alone. Debt management and debt advice companies, such as debts.org can help you today. And remember, if you face your debts head on, and try to find a resolution to suit all parties, the situation is rarely as bad as you think, and house repossession is by no means a foregone conclusion.

When do I need to seek debts advice?

You should seek debts advice with debts.org if you are:

• Falling behind with your mortgage

• Having to live increasingly off your credit card to make ends meet• Taking cash/credit from parties you would not normally approach

• Borrowing money from friends or family to pay bills or pressing creditors• Borrowing money on one credit card to pay another

Wherever possible you should nip your overspending in the bud, and try to divert some of your income to pay relatively small debts before they accumulate. If you can´t do this then you should seek professional advice from debts.org who will walk you through the process of debts management plans and Independent Voluntary Arrangements. The sooner you do this the more hope you have to resolve your situation. As tempting as it is, never ignore the situation – it will only make it worse.

Is a debt advice company the solution?

An insolvency practitioner is a professionally-qualified person who can help resolve people´s financial situations. Insolvency practitioners are required by law to have a licence and are also required to have professional indemnity insurance. Alternatively you can speak to a debt advice company, who can offer you several options to reduce your debt.

Meeting with an insolvency practitioner

You may be worried about your house being repossessed, or your debts may simply have become too much to cope with. An experienced debt advisor will explain and arrange the best options for your individual circumstances. Most people with debt problems are embarrassed to come clean about the extent of their debt, but you need to realise that the majority of debt relief companies and debt management companies have heard it all before, and there is no need to feel uncomfortable. The straighter you are about your situation, however dire you perceive that to be, the more likely you are to find a debt solution. You should take along with you a list of your assets and liabilities, plus details of your income and expenditure. Different options will be explained to you clearly so you understand the options open to you. Contact debts.org for free and helpful advice on any of the following:

Debt management plan to help debt problems

A debt management plan (DMP) is a method used in various countries for paying unsecured debts in a manageable way. Often, debts spiral out of control and can exceed income. A DMP involved a third party (debt management company) who will assess income and budget and debts, and will re-negotiate interest rates and payments with the lenders to help the debtors.
Negotiated rates are based upon the higher probability that the lenders will be able to recoup some of the original debt, if not all of it, by allowing the lender to pay more realistic repayments every month. Any terms put forward on behalf of the debtor are assessed at the discretion of the creditors, and once accepted, can help both parties concerned. A good debt service company would only suggest to the creditors that the lenders pay what they can reasonably afford, after priority debts are paid. Creditors may ask for an annual update of the debtor´s financial situation to make sure they are only paying what they can afford.

An IVA to help debt problems

Depending on personal and financial circumstances, the best option for you if you are suffering debt problems may be an Individual Voluntary Arrangement (IVA).
An IVA is a legally binding agreement with your creditors which a debt service company can help to arrange to give you enough time to get your house back in order. Once started, the creditors will be able to examine the proposals of the debt management company on your behalf, and if agreed, will take a back seat, while you implement the changes to your payments/arrangements. You may be expected to pay a proportion of your future income into a fund over a period of time, which would mean the creditors will receive more than they would, had you been declared bankrupt.

The arrangement could also involve a third party paying funds to the creditors to wipe out the debt and make a full and final settlement. This could be well-below the actual sum you owe, but could be accepted by your creditors.

Don´t assume you will automatically lose your home or have your house repossessed, as in many cases you can retain the ownership of your private residence. Contact debts.org for sound, professional advice about your circumstances and the best route to take to help with debt problems.

Bankruptcy is not always the answer to debt problems

Although bankruptcy does not carry the same stigma it did years ago, you may well find that a debt management plan or an IVA will suit your circumstances better if you need debt help.
If an IVA is not appropriate for you, bankruptcy could well be the answer. You can contact a reputable debt management company for further advice about bankruptcy, but you will need to go to the county court to start the process. A bankruptcy normally lasts for 12 months but can be less, and you can usually continue to work during it.

Is there life after bankruptcy?

A court-appointed trustee, a professional person, will be appointed by the court to realise any assets you may have and deal with your creditors. The main asset most people possess is their house, but a trustee cannot seek to sell the house for at least 12 months if a spouse or children are involved. Bankruptcy does not automatically mean house repossession. Any decision will depend on the value of the house, the outstanding mortgage and the individual circumstances of the case. There are no hard and fast rules regarding the repossession of homes due to bankruptcy, so you should not be afraid to seek advice. After the conclusion of the bankruptcy, you can start to rebuild your life, and review your career options.

Labels: creditors, trustee