Don’t worry about Debt!
Don’t worry about Debt!
The most common thing people do when in debt is the worst possible thing – spend their time and energy worrying about their debt.
I suggest you look for something to do about it!
But here’s the thing, your creditors (the people you owe the money to) do not want you to pay it all back!
Don’t Worry About Debt: How to Remove the Burden?
You notice some companies promise to get you out of debt by identifying legal loopholes. These don’t always work and even if it does, you may be left with problems getting credit in the future.
Don’t Worry About Debt: How to Draw Up a Plan?
You could analyse your debt situation yourself and make a plan. But very few people can do so, on their own. The government and financial industry offer support through charities aiding those in severe debt. You can contact the charities to fill in an online or paper questionnaire.
But what if you can’t manage to do that or just feel incapable of getting started on it?
If you’re willing to take action, seeking assistance from an impartial party is the best solution.
The best person to help is someone who has:
- No personal interest in your affairs
- The expertise to set up a financial plan
- Got out of debt themselves
A free telephone-based information and advice for people in England, Wales, and Scotland.
Freephone 0808 808 4000
A word on Bankruptcy
Bankruptcy is least burdensome for those with little to lose, willing to live modestly on a low income indefinitely.
Individual Voluntary Arrangements (IVA)
An IVA constitutes a formal and binding agreement between an individual and their creditors. A licensed Insolvency Practitioner must arrange and supervise it, typically lasting for 5 years. Once accepted by the creditors, the IVA freezes interest and charges.
After 60 months, the IVA writes off all remaining debts. The IVA usually includes the Insolvency Practitioner’s fees. It requires a minimum of £15k debt, spread among 3 or more creditors, and the individual must offer a minimum repayment of approximately 25% to each creditor if there’s enough disposable income.
All savings and investments will need to be fully disclosed to the creditors. No further credit can be obtained during an IVA.
However, if your circumstances change over the 5 years of the agreement, the terms are still binding. For example, if you are a homeowner, and the value of your home rises during the agreement, the creditors can take 50% of this increase in the final year.
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