February 5th, 2010
If anyone finds themselves in debt then without doubt the single best piece of advice anyone can receive is that they should face up to the reality of the situation. It’s vital to take stock of exactly where you stand, to start making arrangements and to tackle the problem before things deteriorate further.
Sure, it’s never nice to have to face up to your financial demons and it’s common for people to feel a little embarrassed or reticent about starting on the path to financial recovery. Don’t let misfortune or mistakes in the past ruin your future. Take professional advice and get to grips with things as soon as possible.
What about an IVA?
UK financial authorities introduced IVAs in 1996 as a formal and legally binding agreement made between a debtor and creditors under which the debts are frozen. More flexible and less onerous than bankruptcy, if you have debts of more than £15,000, a regular income and can budget to make monthly repayments (usually over 5 years) then IVA companies in England or Wales may have just what you need.
In Scotland an equivalent to the IVA is known as a Protected Trust Deed.
They certainly seem to be proving a popular option. Though IVA advice was originally only offered to small businesses that got into financial difficulties and wanted to avoid bankruptcy, they have proved increasingly popular with individuals. In 2009 around 50,000 people entered into an IVA. UK government figures revealing a leap of 25% on 2008 as the recession deepened. Over the same time nearly 80,000 individuals were declared bankrupt while company failures totalled around 50,000.
If you are looking for help and IVA advice on how best to deal with debt or considering your next move on where to turn for impartial advice and guidance then there is a wealth of professional, independent IVA companies out there. You may be surprised at the range of options available and surprised too at how good you will feel knowing that you are taking positive steps to address the situation.
Tags: Bankruptcy, iva, iva help, protected trust deeds
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February 4th, 2010
Financial problems come in many forms, shapes and sizes and often arise through no fault of your own. Maybe you’ve been let down by someone who owes you money. Maybe you have fallen victim to the economic downturn and lost your job or had essential overtime cut. Health reasons, domestic situations, family circumstances can all come in to play and cause all manner of difficulties.
If you have financial problems then take consolation from the fact that you are far from alone. Figures reveal that as many as 1000 people a day are seeking some form of IVA help or formal debt rescheduling plan.
One of the most flexible options for dealing with debt, an IVA (or the Scottish equivalent the Protected Trust Deed) is often a preferable alternative to bankruptcy for those in serious debt. For example, an IVA or Protected Trust Deed is more flexible, helps you avoid the restrictions of bankruptcy and protects your assets unlike bankruptcy.
In setting up an IVA you need to organise a legally binding timetable with your creditors in which to clear your debts, usually over a period of 5 years. At the end of the period, as long as the agreed percentage (usually somewhere around 50% of their original debt) has been made, any outstanding debt may be written off.
In order to qualify, you will need to meet the following requirements:
• You must have at least £15,000 of unsecured debt
• You must be able to pay at least £200 a month into the IVA
• You need to owe money to three or more. creditors.
• You need to have a regular income
Though an IVA can be an effective way of avoiding bankruptcy if you fail to maintain payments or default on the arrangement you may end up being declared bankrupt.
IVAs have been around for a while now so these days IVA help is plentiful and professional. If you think an IVA could help then seek advice. Make sure though that you take the necessary professional and independent advice before committing.
Tags: Bankruptcy, debt help, iva, iva help, protected trust deeds
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January 27th, 2010
Have you heard of protected trust deeds or a Scottish trust deed? Well if you’re based in Scotland and have run up debts that are proving tough to manage you may well be interested in taking some trust deed advice or at least finding out a little more about how protected trust deeds can help you.
Times have been tough over the last couple of years for many people. The length and the depth of the recession are cutting deep. According to the BBC an estimated 125,000 people were made bankrupt in 2009. Accountancy giant KPMG actually believe that the figure may top 150,000. The Council of Mortgage Lenders (CML) only compounded the doom and gloom by estimating house repossessions will top 60,000.
With only faint signs (a surprising fall in unemployment this month for example) offering any hopes that the UK’s fragile economy will turn the corner in the near future, many experts are predicting another tough year ahead. There is little doubt that over the next 12 months many people will face increased financial burdens and will end up in severe financial difficulty. Failure to adequately manage debt means that unfortunately some people will end up going bankrupt.
Thought probably the best-known way through which people escape severe debt, bankruptcy is a serious step to take and deserves very careful consideration. Yes it ends after one year, but you may well end up forfeiting all your assets including your house to pay something off your creditors.
There are alternative ways of managing debt that anyone struggling with money problems should be made aware of especially if you live in Scotland.
Available only in Scotland Scottish trust deeds or protected trust deeds (PTD) can prove a straightforward and cost effective way of managing your debt problem. Similar to IVAs (Individual Voluntary Agreements) protected trust deeds enable you to repay your debt over an agreed length of time at a rate you are able to afford. Once the agreed repayment period has expired any remaining money you owe is written off.
Interested? Talk to a reputable debt guidance agency for the latest trust deed advice.
Tags: Bankruptcy, iva, managing debt, protected trust deeds
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January 25th, 2010
Debt in the UK is at record levels and many debt advice organisations and agencies are dealing with unprecedented numbers of requests for bankruptcy and Individual Voluntary Arrangement (IVA) advice – even the Government owe nearly 800 billion – (it may surprise you to know that as a proportion of overall economic output debt at 68.7% of GDP compares favourably with the US – 84.8% -, Italy – 115.8% and Japan – 218.6%). International global debt comparisons aside, the point still remains; more people owe more money than ever before.
Often through no fault of their own many now find themselves in positions where their debt has rapidly gone from manageable to out of control – debt that needs addressing quickly. Increased unemployment, shorter hours, less overtime, pay freezes and pay cuts has all affected incomes. Expenditure on the other hand seems to have rocketed. Fuel prices, council tax, food costs, utility bills, you name it, everything seems to have gone up drastically over the last couple of years.
If you find yourself in the position of owing more than you can cope with, what can you do? What are the options when it comes to managing your debt?
Consider the benefits of an IVA Advice regarding IVAs is consistent – Individual Voluntary Arrangements can offer a relatively simple and effective alternative to bankruptcy. Particularly appropriate for unsecured debts such as personal loans, bank overdrafts, store cards and credit cards once in place an IVA also offers ongoing protection from additional creditor claims. You agree to pay an affordable amount to your creditors over a set time period (usually 60 months) and the end of the payment period any outstanding debt is written off – up to 75%.
If you live in Scotland then you have the option to pursue a system that’s similar to the Individual Voluntary Arrangement – the Protected Trust Deed (PTD). Instead of the five-year period usually applied to IVAs The Protected Trust Deed lasts only for 3 years. Again, in many cases Protected Trust Deeds might be regarded as a less onerous alternative to bankruptcy which in Scotland which is referred to as Sequestration.
For any additional information on IVA or indeed anything to do with debt management make sure you contact a reputable debt advice agency.
Tags: Bankruptcy, Debt advice, Debt management, iva, managing debt, protected trust deeds
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November 30th, 2009
If you’re in debt, everything can seem to spiral out of control very quickly. Rather than seek debt advice straight away, the temptation is to just let things coast along and hope that it won’t get any worse. Trouble is, adopting that ‘ostrich’ syndrome means that your finances are out of control and will continue to be so – unless you take control back and seek a debt solution.
Debt management is exactly what it says it is – managing your debts and getting them back under control. The first step is to realise that you can’t let the situation carry on in its present state any longer and to sit down, with a debt management expert if necessary or speak to the national debt helpline, and take a good, hard look at your finances. Make a list of your major creditors and then get in touch with them. By contacting them and informing them of the situation, not only will they be more willing to negotiate more manageable repayment terms, but you will also prevent them from sending you those dreaded final demands every day.
Work out your outgoings as compared to your income, but remember that you have to leave yourself something to live on otherwise the spiral of debt will get worse. Prioritise your creditors (don’t forget the little guys, but at this stage your major creditors take priority) and allocate a certain amount of your income towards paying them off first. You may not be able to write off debt but once things are on a more stable footing and you’ve taken control back, it’s easier to work out payment plans that will help you to clear the debt more quickly.
If all of this seems daunting and you’re still in a panic about managing your finances, talk to an independent debt counselling service. They’re specialists in debt management and may know some ‘tricks of the trade’ to help you control your money in a more manageable way. Never be afraid to ask for help.
Tags: Debt advice, debt consolidation, debt help, Debt management
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November 24th, 2009
When serious debts are mounting up, many people fear the spectre of bankruptcy and the devastating impact that can have on your finances, your credit rating and your life as a whole. But seeking debt advice from an independent debt management service and applying for an individual voluntary arrangement (IVA) could be a better way to achieve unsecured debt consolidation on credit cards and personal loans, making repayments more manageable.
An Individual Voluntary Arrangement is a contract between you and your creditors. You pay an agreed monthly sum, usually for 5 years. This is divided up between people you owe money to, who accept the sum in settlement of the amount you owe them. Once the term of that IVA is over, you have the chance to start afresh without the impact declaring yourself bankrupt can have over the long term. Unlike bankruptcy, an IVA does not prevent you from running a business so if you want to start up your own business during the term of the IVA, you can. It could be a way of getting yourself out of debt and back on your financial feet much more quickly.
The first step is to get some IVA debt help – speak to the national debt helpline or to any one of the specialist IVA companies in the UK. In essence, IVAs restructure your payments to creditors so that they become more realistic and effective, putting you back in control of your finances. By opening the lines of communication and sticking to an agreed repayment plan, you reduce the amount of pressure that is often placed on those in debt by their creditors, making life much more manageable.
Bankruptcy is a last resort debt solution and, even though it has become more common particularly during the recession, it still carries a certain amount of social stigma and does invariably affect your credit rating for years afterwards. An IVA helps you avoid this unenviable situation and prevent it from becoming a millstone around your neck for years. Talk to an impartial debt advisor if you think an IVA may help you control your debts.
Tags: debt, Debt advice, debt consolidation, debt help, Debt management, iva
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November 18th, 2009
In just one day, 362 people in the UK will be declared insolvent or bankrupt. KPMG estimate this will increase to 411 people a day throughout 2009 or 1 person becoming bankrupt or entering into an Individual Voluntary Arrangement (IVA) every 3.5 minutes and many others seeking help from debt management services.
Frightening statistics. And if you don’t believe the recession is as bad as the headlines have been making out, consider that if the number does increase to 411 per day declaring insolvency or bankrupt, that will mean an incredible 150,000 people could be declared bankrupt by the end of the year. That’s the size of a medium sized town. Bankruptcy seems to be presented as an easy option to take if you get into difficulty financially. The attraction of not having to pay creditors and effectively write off debt may be tempting many to sign on the dotted line and bankruptcy doesn’t seem to have the social stigma that it once attracted.
But there are significant drawbacks of declaring yourself bankrupt. Your credit rating will be seriously damaged. Of course, if your financial circumstances are severe enough, you may not really care that much about your credit rating and simply need immediate help managing debt, but it can have lasting consequences even years afterwards. Your financial history may also impact your chances of applying for certain jobs, particularly in the banking and finance sector. Let’s be honest – would you take financial advice from someone who’s been declared bankrupt?
Finally, it can seriously damage the finances of those you owe money to. So not only is your financial situation affecting you – like ripples on a pond it spreads out into the wider community. Obviously, the best option is not to get into such a financial pickle that you have to consider bankruptcy in the first place. But if you are in trouble, and before you reach for the insolvency paperwork, talk to a professional debt advisor who may be able to show you an alternative that keeps you in business, trading and financially viable.
Tags: Bankruptcy, Debt advice, debt help, iva
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November 18th, 2009
People seek debt help for reasons as varied as the people themselves. Whether it’s an unexpected turn of events or a gradual build up of problems, facing debt problems is always a worrying time, but thankfully there are a number of debt counselling services available. The top five causes of debt range from the unexpected to a ‘dripping tap’ effect.
Credit card debt
One of the primary causes of the economic recession was the ease with which ordinary people could run up thousands of pounds of debt on ‘easy credit’. Total credit card debt in July 2009 was £53.9bn, and with the interest charges on credit cards being higher than the base rate by a considerable amount, credit card debt is a growing problem. Many people solve runaway credit card debt by looking for debt consolidation help.
Unemployment
One in 33 people in the UK is facing unemployment in 2009. The financial buffer of a regular income can be ripped away very quickly and because savings are at an all-time low in the UK, very few people have the money put by to cover themselves in case of unemployment. Losing your job can mean rapidly mounting debt in a very short space of time. If you lose your job and can’t make your payments you need to act quickly; start with government debt advice – they can recommend an appropriate debt management solution.
Illness and divorce
Illness can put you out of work for the long term, and even if you keep your job you will only be eligible for statutory sick pay – a far lower amount than your usual income. Divorce and separation can also be a financially trying time leading to debt, as people have to reassess their lifestyle and their outgoings. A good debt management service will understand the implications that personal problems can have on debt.
Poor financial management
The ‘dripping tap’ effect, poor financial management and a temptation to adopt an ‘ostrich’ syndrome to mounting debts won’t make the problem go away. Perhaps one of the easiest areas to tackle, poor financial management can be quickly turned around with the right debt advice and help.
Failure to maintain credit agreements
If you are committed to credit agreements and you fail to maintain your end of the bargain, the interest charges can start to mount up. Creditors will start chasing for payment (and charging you for the privilege), but again, this is an aspect of financial management that can be tackled relatively easily to get you back on track.
Tags: Debt advice, debt consolidation, debt help, Debt management
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November 12th, 2009
Facing up to debt and getting professional debt advice can be a terrifying prospect. The Citizen’s Advice Bureau deals with over 9,000 enquiries a day concerning personal debt, and with the effects of the recession still being felt, they expect that number to continue rising for the foreseeable future. Other services such as the National Debt Helpline are seeing similar figures. But there is light at the end of the tunnel, and by taking three simple steps, you can start the process of seeking help with debt, reducing your payments and, eventually, becoming debt free.
1. Admit there’s a problem
Ignoring mounting debts and hoping that they’ll either ‘magically’ go away if you don’t admit to them or spending most of your time desperately worried about coping is not the right way to manage a debt problem. To take control, you first need to admit that there is a problem.
2. Get professional debt advice
Trying to solve the problem on your own will be difficult if not almost impossible. If you are in debt, there are things you can do to drastically reduce the problem that a debt counselling expert will be able to tell you about. They spend their entire careers helping people get out of debt every day, and having that expert advice can make all the difference in a financial crisis. So as soon as you realise that there is a problem, get in touch with an impartial debt advice service who will be able to sit down with you and help you plan a strategy to take back control of the situation and get you out of debt.
3. Have a plan
A debt advisor will be able to help you put together a debt management plan that, if you stick to, can mean that you’re debt-free far more quickly. But for that plan to work, you have to stick to it. By informing your creditors of your situation and drawing up voluntary agreements with them to repay the outstanding amount over a longer period of time but with smaller, more manageable payments, for example, you can avoid the bankruptcy route and problems with credit later on.
Tags: Debt advice, debt consolidation, debt help, Debt management
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November 6th, 2009
The recent recession (which the headline writers now say we are slowly starting to climb out of) hit hard and fast. Whilst everyone was quick to blame the banks’ exuberance and penchant for huge bonuses and high risk deals, the truth is that the age of easy credit for all was the real cause of the financial meltdown. Unlike other recessions, this one has hit everyone, from the average man in the street to the high-flying city bankers and the numbers of people seeking debt help has significantly increased.
Because credit cards, ‘interest free’ credit and other financial carrots were dangled in front of an eager and willing public for so long, many people have found themselves seriously overstretched financially when the doors slammed shut on the easy credit culture of the 90s and as a result more and more people are looking for debt management solutions or even ways to write off debt. A far more cautious financial market is now less willing to repeat the same mistakes of that boom time and is coming down hard on those in financial difficulty. Despite billions being pumped by the Government into the banking industry, there has been very little trickle-down effect to the ordinary consumer, leaving them in as much financial trouble now as at the start of the crisis, and consequently many are seeking debt solutions from IVA companies and debt management services.
The headlines may claim that the green shoots of recovery mean an end to the current financial crisis. But the aftershocks of one of the worst meltdowns in banking history are still affecting ordinary people with mounting debt problems. The average household debt in the UK (including mortgage repayments) is over £58,000. The average owed by every UK adult is £30,188 (including mortgages). This is 130% of average earnings. So it’s obvious that personal debt is still out of step with income, meaning that the after effects of the recession are set to continue for some time to come.
Tags: debt, Debt advice, debt help, Debt management, iva
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