Debt Advice – The Four Main Solutions

Generally speaking there are four main methods of debt solution which are tailored to the various needs of people in the UK who are experiencing debt problems.

Many people look for debt advice and help to get them out of what seems like a hopeless financial situation.

Here we’ll take a quick look at each of these debt solutions in turn to give you an idea of who they’re best suited to and what sort of debt advice you can expect:

IVAs – For tens of thousands of UK residents each year, debt advice results in them taking out an Individual Voluntary Arrangement or IVA.  There has been a lot of negative press in recent times about the number of IVAs being entered into and it’s raised questions about the quality of debt advice that many companies are offering. As a reputable debt advice and solutions company, DebtSolver look at the whole picture and will only recommend an IVA to you if we feel it’s right.

An IVA usually lasts for five years and involves paying a pre-agreed monthly sum for the benefit of your creditors. At the end of your IVA, any outstanding debt included in it will be written off and you’ll be debt free.

Debt consolidation – If you have a lot of unsecured debts and are a homeowner then going down the debt consolidation route may be the best debt advice for you. Of course everyone’s individual circumstances are different but debt consolidation loans can bring all your unsecured debt together into one lower and affordable monthly payment through a loan secured against your property. This will mean that you only have one creditor rather than many and will put a stop to those dreaded phone calls and warning letters.

Debt management – When you’re ready to face up to your debts and deal with them head on, the debt advice you receive may recommend debt management as an effective debt solution.  This informal method of dealing with your debts allows you to pay one lower monthly payment to a company who manages your debt. They then distribute this for you amongst your creditors.

Reliable debt advice should always point out the pros and cons of each solution and in the case of debt management, it’s likely that your creditors will continue to add interest to the amount you’re due and they’re entitled to go back on the informal agreement at any time and demand the full monthly repayment.

Bankruptcy – This is considered to be the full stop of debt advice. Due to the far reaching implications of bankruptcy it’s usually only recommended as a last resort. Every year in the UK people declare themselves bankrupt without getting proper debt advice first and end up losing their homes and jobs because of it.

Another of the main bankruptcy disadvantages is that details of your financial situation will be made public so if this is something you need to avoid, seeking professional debt advice as soon as possible could make all the difference.

If you would like more information, ring Debtsolver now on 08000 434 336 (Free for UK residents only) or complete our debt wizard to see if you qualify