An Individual Voluntary Arrangement or IVA might be the answer to your
debt problems. This is just one solution that UK debt companies
can offer you. An IVA is a legally binding contract that your creditors will
vote on to see if they want to accept the arrangement. If creditors for at least
75% of the money you owe vote for the IVA to be set up, the rest of the
creditors have to accept it as well. They will have to accept it even if they
voted against it, which can be a big help for you when you want to make sure you
deal with all your debts in one go.
You will use an insolvency practitioner to help you with the IVA. He will sit down with you to see what your expenses are and what you can afford to pay on your debts. He then will set up the meeting where the creditors vote. You should go to the meeting if possible. In most cases your creditors will accept the IVA. You will pay them a small portion of what you actually owe them. You would think they would not go along with the arrangement but they know that your situation must be dire or you would not be doing an IVA. Your creditors would rather accept a small portion than see you go bankrupt. With a bankruptcy they could end up with nothing at all.
An IVA will not affect your job even if you are in law enforcement or a president of a company. Your house will be safe. You may have to use some of the equity on your home to pay on your bills however. Your credit score will be hit in a negative manner but chances are you already have poor credit if you are considering this form of consolidation of debt.
Another popular system for consolidating debt available in the UK and US is setting up a debt management plan. Although you can actually set up your own plan with your creditors it is best to use a debt management company. They are experts at handling creditors and getting the best possible deal for you. What they will do is explain to your creditors the seriousness of your situation. They will then get the creditors to waive late fees and reduce the interest rates on the loans and credit cards. In some cases they will even get the interest frozen so it does not continue to accumulate. Since credit card companies charge such high interest, when the interest is reduced you will see a big difference in your payments.
Instead of paying several payments to different companies and lenders you will make one monthly payment directly to the debt management company. They take that money and pay your creditors. In a matter of a few years you will be debt free. The payment you make will be affordable and you will no longer have trouble making ends meet.
For debt management in the UK you have choices. It is best to not end up in serious debt in the first place. Do not use credit cards. You should always wait until you have the cash on hand. For large purchases tuck money away in a savings account until you have enough for the purchase. If you do not abuse your credit you will not end up in debt.
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