The contrast between Bankruptcy and a Debt Management Plan is startling in terms of what creditors can expect to receive from borrowers who encounter financial difficulties.
People who enter a Debt Management Plan can expect to be making payments to their creditors for many years if they are to repay the debt in full, although some creditors may agree to reduce or forego interest and penalties. Nevertheless although a Debt Management Plan can be a relatively attractive solution for creditors the long duration can be a disadvantage for the hard-pressed borrower.
Borrowers who become insolvent and who declare themselves bankrupt or who are bankrupted by a creditor on the other hand can expect to be discharged from bankruptcy within one year although they may have to make contributions for up to three years via an income payments order. Creditors however will frequently receive little or nothing from the estate of a bankrupt when the fees and costs of bankruptcy are paid.
Although it looks like a case of all (in a Debt Management Plan) or nothing (in Bankruptcy) for creditors, there is a third way. An Individual Voluntary Arrangement (IVA) will usually yield a reasonable dividend for creditors who can expect a substantial portion of the borrower’s debts to be repaid in a reasonable time frame. Most IVAs last for five years but the term can be considerably shorter if a lump sum settlement is agreed. In a minority of cases the IVA may run for a bit longer than five years but this is exceptional. Interest and penalties on debts are frozen by law and repayment of between 20% and 40% of the debt frequently occurs although in certain circumstances creditors may accept repayment of less than 20% and in a small number of cases up to 100% of the debt may be repaid.
I tend to panic for panics sake and all those at National Debt Relief ease my mind at every turn. Nothing seems too much.
I'm 4 months into the plan and have absolutely no complaints. Thank you so much.
Thank you all for helping me out of a difficult time with my finances! Great service from a great company.
From the moment I started dealing with National Debt Relief I knew they were the right choice for me.