||Bookmark this page!
In our troubled
economic times, many people have found themselves unable to pay
their bills. Whether on a car payment or mortgage, falling behind
could mean repossession or foreclosure. Thankfully there are
numerous resources available for those with overwhelming debt.
Debt consolidation is a common, sensible way to manage debt. One of
the most useful tools available is known as debt management.
Organizations that offer debt management services work with the
debtor to calculate what they can realistically afford to pay each
month. The organization then contacts creditors and asks whether
they will work with the debtor and allow lower payments. The debtor
then makes one payment to the organization which in turn pays the
creditors. Many organizations charge a fee for their role in
consolidating someoneís debt. Others offer their services free of
charge; one such is the Debt Advice Bureau.
Another debt consolidation practice is the acquisition of a personal
loan. Personal loans are available as either a secured or an
unsecured loan. A secured loan is obtainable for those debtors who
have something to offer as security against the loan. Homeowners are
most likely to be approved for a secured loan. An unsecured loan
requires no collateral from the borrower, but interest rates are
often much higher than for a secured loan. Once the loan is granted,
the debtor can pay off outstanding debt, being then left with a
An additional route available for those needing debt help is an IVA
or Individual Voluntary Arrangement. A debtor wishing to apply for
an IVA works with an Insolvency Practitioner (IP) who prepares the
application. The applicant and the IP calculate what the debtor can
afford to pay. The IP presents the application to the creditors who
vote on whether or not they will accept the terms. The debtor has
the opportunity to see and review the application before it is sent
out. If the creditors agree to the arrangement, the debtor will
begin to make payments. The payments are typically made for the
duration of five years. The less common alternative is to make one
large or lump sum payment. Once the five years have passed or the
lump sum paid, any remaining debt is written off and the debtor is
debt free. One disadvantage to an IVA is that it affects a personís
Debt Help - probably the largest choice of
Debt Help in the UK!