Debt Reduction Advice.co.uk

professional help to reduce your debt problems

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Reducing Debt Problems

At Debt Reduction Advice.co.uk we have many years experience of assisting people with financial problems. If you are in debt then it is advisable to seek an expert opinion on how best to overcome these problems. An overview of just some of the solutions to debt that are available to UK consumers can be found below.

Debt Management Programmes (DMP's)

A common solution for people with debt problems is to enter into a Debt Management Programme. A Debt Management Programme is an informal arrangement designed to ease your financial worries by reducing your debt repayments to a manageable level. Debt Management Programmes can be arranged either by your local Citizens Advice Bureau or most likely through a commercial Debt Management Company. The Debt Management Company will negotiate with each of your creditors to reach a more favourable arrangement for repaying your debts.

Advantages

• not bound by narrow qualifying criteria and so potentially available to everyone if agreement of creditors can be reached
• can be a good solution and allow you breathing space if your financial problems are only temporary, for example to cover a short period of unemployment

• if arranged via a Debt Management Company any fees charged will be added to your debt increasing the length of time it will take to be repaid
• as it is an informal arrangement there is no legal guarantee

Individual Voluntary Arrangements (IVA's)

For some people entering into an Individual Voluntary Arrangement (IVA) will be the most attractive solution to their debt problems. However to qualify for an IVA you must have debts in excess of £15000 spread between more than one creditor. Typically an IVA will last for five years during which you will make monthly payments based on your current income and what you can resonably afford. At the end of the IVA any remaining unpaid debts will be written off.

Advantages

• up to two thirds of your debt may be written off
• free yourself of debt in a fixed period of time

• an IVA is only an option for people fitting a fairly narrow qualifying criteria
• even if you qualify there is no guarantee your creditors will accept the IVA proposal
• usually a more expensive option than filing for bankruptcy

Debt Consolidation Loans

A Consolidation Loan is used to pay off a persons existing debts. Rather than making multiple payments to all your creditors after the Consolidation Loan you will only have one monthly debt repayment to manage.

Advantages

• consolidate your debts into one single repayment at a favourable rate of interest

• only beneficial if the rate of interest on the loan is no higher than that of the existing debt and is sufficiently low to allow the loan to be repaid over a reasonable length of time
• if your credit rating has been affected then taking out a loan may not be an option

Bankruptcy

Bankruptcy is often seen as a 'last resort' solution for individuals in financial difficulties, however in many cases it is also the most suitable. This is especially the case if your debts are large but you dont qualify for an Individual Voluntary Arrangement.

Advantages

• a guarantee that your debts will be cleared in a fixed period of time
• the bankruptcy repayment period is shorter than is the case in a typical IVA

• it is likely that you will lose your home and other valuable assets
• your credit rating will be affected for six years meaning it can be hard for you to obtain credit
• you may be excluded from certain professions and the bankruptcy will be made public

Try us today. Call one of our highly trained debt reduction advisors in total confidence. A 10 minute conversation could reduce your debt problems dramatically.