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Research carried out by the insolvency trade body R3 indicates that as many as four in ten people are extremely worried about the amount of debt they are in. In fact for many people this constant source of worry leads to sleepless nights and an inability to lead a normal life.
If you are one of the 19 million people in the UK who are in this position, it is time to stop your financial free-fall and wrestle back control
In recent years there has been a real increase in the types of Debt Solutions on offer. If you are in Debt, this increase is fantastic news. It means you can consider the various Debt Solutions and pick the one that best suits you
If you just want a basic overview of the Debt Solutions on offer, then look no further.
Here is a brief look at the 3 most common Debt Solutions....
Debt Consolidation
This is where you take all of your Debts and consolidate them into one. Doing this reduces the amount of creditors you have to deal with and, if you get a good interest rate, it can cut down your monthly repayments allowing you to pay off your Debt quicker. If you do this before your Debts spiral out of control, you can prevent your credit rating from being affected. For this reason Debt Consolidation is one of the most popular Debt Solutions
Debt Management
A Debt Management Plan could enable you to reduce your monthly repayments, stop demands from creditors and reduce your debts without having to borrow more. In terms of Debt Solutions this can be very effective. Debt Management companies will often write to or contact your creditors and make the necessary arrangements for you to pay back a more affordable amount per month on your behalf
An IVA
An IVA could allow you to pay off your Debts quickly – usually within 5 years.
With an IVA you may find some of your Debts will be written off completely and by taking an IVA you can stop legal action being taken against you. For some people an IVA is the most effective of the Debt Solutions available.
It is worth noting that due to the way in which IVAs operate there have been reports of many scams in relation to this type of debt solution so as with any financial arrangement make sure you know exactly what you are getting into before you commit yourself
Bankruptcy
Bankruptcy is not something to be taken lightly, but in some cases Bankruptcy is the only option.
If you declare yourself bankrupt any assets you have, which are considered to be non-essential, will be used to pay your Debts off.
Bankruptcy is sometimes used by people who have an over-whelming amount of Debt that they simply cannot pay off.
Bankruptcy is an actual legal status and will usually last for 12 months. After this period you will be issued with a discharge certificate
There are some restrictions when it comes to Bankruptcy so make sure you are aware of any restrictions and as well as the potential implications of it
Make Certain
By committing yourself to certain debt solutions you could be automatically preventing yourself from taking advantage of others. For example, most Mortgage lenders will not allow any customer who has an IVA to take additional borrowing on their Mortgage in order to consolidate debt. Before you take up a debt solution make sure you have considered every potential avenue and the consequences of walking down it
Take Action
The above Debt Solutions are popular, but they might not be the only Debt Solutions available to you.
The National Debt Helpline is a Government funded agency charged with offering people free debt advice, your next step may be to make contact one of them: on 0808 808 4000
Whatever you decide to do, do something
Find an Independent Financial adviser
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