Get Out of Debt in the New Year
New Year is a perfect time for self improvement. Use it as a time to take stock of what’s been and set your mind on the future. Some might want to better themselves with exercise and others by quitting smoking but regardless of the approach, we do these things in order to best prepare for the future. If you’re facing mounting debt pressure, it’s not going to get any better by itself. The sooner you address the problem of bad debt, the more likely you are to find a favourable solution. So, don’t carry your debt burden any further. Make it your New Year’s Resolution to become debt free and look to your financial future with confidence.
Everyone’s debt problems are different because everyone’s financial circumstances are different. There’s no one size fits all, quick fix debt solution. Getting specialist advice on the different solutions available on the market will be your first step to freedom from debt. Talking to an experienced debt advisor will help you to decide on the best course of action. It can be a confusing market and rushing into the wrong option can have serious consequences.
If you are feeling overwhelmed by the stress of spiralling debt in the wake of Christmas overspending, you could feel that the only choice you have is to file for bankruptcy and start again. In the most severe cases, this could be true. However, such are the implications of individual bankruptcy that you would be well advised to view it as a debt solution of last resort. It puts your home and other valuable assets at risk and although the term has been reduced to 12 months from 3 years, it leaves a lasting impression on your credit report. This could hamper future attempts to secure credit and limit your career options. In addition to this, there is a certain stigma inherent to bankruptcy and although it’s beginning to improve, it is worth remembering that bankruptcies are published in your local paper and in the London Gazette. Getting specialist debt help will give you a better understanding of these implications but it will also give you an insight into the alternatives.
Less severe than bankruptcy but still a serious response to the problem of mounting debt, an IVA is for people with over £15,000 worth of unsecured debt which is spread between a few different creditors. The IVA, or Individual Voluntary Arrangement, is a legally binding agreement between you and your creditors. It’s brokered by a Licensed Insolvency Practitioner who examines your finances and helps you to draw up a proposal to your creditors. Three quarters of your creditors have to vote in favour of the IVA, a percentage based on debt value rather than number of creditors. So, the monthly repayment has to be realistic but affordable too, as the term of an IVA is usually 60 months. The consequences of missed payments can be severe but after successfully completing the term, any remaining debt will be written off. An IVA won’t put your home at risk either. For those who are at risk of bankruptcy, an IVA can be a more attractive proposition.
As getting debt free is now your New Year’s Resolution, don’t let your financial woes drag on any longer. The sooner you act, the better your chances are of avoiding bankruptcy. After all, there is no quick fix to the problem of bad debt so commit to the right debt solution now. Talk to one of the specialist debt advisors at Debtsolver for more information on these and other solutions that are available to you.
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