When you’re struggling to keep up with your debts, it can seem like you have fewer and fewer options as things get more and more out of control. However, with the right advice you might find that things aren’t as dire as you think.
Get debt advice
The best way to establish what your options are is to speak to a qualified professional. If your situation is looking as though you may be moving towards insolvency, it’s best to seek the services of an Insolvency Practitioner. They will be able to take a look at your finances and help you to work out what the best option is.
Individual Voluntary Arrangements have few restrictions, but this doesn’t mean that an IVA is the best option for everyone. Typically, an IVA is used to avoid bankruptcy, and will involve paying back more of your borrowing than bankruptcy does. The plus side of course is that an IVA has less of an impact on your long-term financial health.
IVAs are normally used for individuals with debt totalling at least around £15,000 and to at least 3 creditors, although there is some flexibility. You will normally need to be able to afford at least around £200 in the monthly payments for an IVA, although again there is sometimes a little leeway.
Other Options
If you cannot get an IVA, or your IP advises that it’s not the best option for you, find out what your other options are and take the IPs advice on them. If you own assets you may be able to use these to help get your finances under control, for example by selling or releasing equity.
You can also opt to try to negotiate with your creditors direct, and come to some informal arrangement with them. This can be a tricky process, but reduced terms for your credit agreements may just give you the breathing space you need. If you find it difficult to deal with your creditors personally, there are mediation services up and down the country that can help.
If you do find that you run out of options for continuing to handle the debts, and cannot get an IVA for whatever reason, you really do need to take the advice of an Insolvency professional. It may be that bankruptcy is going to be necessary for you, but by all means make sure you get the right advice before taking any big decisions.
To explore any of the above please contact us at National Debt Relief.
National Debt Relief belongs to a firm of leading chartered accountants who are one of the largest insolvency practices in the UK. We offer a complete portfolio of personal insolvency services in relation to IVA, Debt Management Plan and Bankruptcy. All our debt advice is confidential and with no obligation.