By: Mona
The numerous options available can build more difficulty
and worry for those who are in debt. For that reason by just being aware of
these additional options is not enough.
Throughout this piece we aim to go into detail about some of the essential information and figures that debt advisers look for when working to form the best debt resolution options for their client. The content is not relevant for residents of Scotland; they have a distinct but comparable list of options to choose between.
The amount of unsecured debt a client is in matters to the debt advisor when considering which debt resoloution alternative the client should go for. Bank loans, store cards and credit cards are recognized as unsecured debts, considering that secured debts would be things like your mortgage or hire purchase on a car. Fiffteen thousand pounds is the minimum amount for an IVA which is quoted by IVA companies, more recently there are some companies that look at lower debt levels than £15,000
If your debt is lower than this amount, an appropriate option may be a debt relief order, a debt management plan or bankruptcy.
Your assets are also important to debt advice professionals. Common examples of such assets might be equity in your house or a vehicle of significant value that is owned without finance owing on it. If your assets are of a value in excess of your unsecured debt it's likely that the Individual Voluntary Arrangement and debt relief order options will not be appropriate or available, although some exceptions might exist. As bankruptcy will likely to threaten the assets themselves most will people will look to other options such as auctioning the assets themselves or rescheduling repayments by the means of a debt management plan. Depending upon your circumstances you may also be able to look at the options of refinancing your assets to repay your unsecured debts.
If your level of assets is lower than your amount of unsecured personal debt you may find that an Individual Voluntary Arrangement is worthy of further consideration. You should be aware that you may be required, if it is possible, to release some of this equity for the benefit of your creditors. Anyhow safeguards are built into this process that should mean your home is safe assuming that you keep up with your mortgage and IVA payments monthly.
Assessing your ability to make payments towards your debts each month is also necessary for a debt or IVA adviser. Should it be the case that little or no affordability for such a payment exists it should alert you to the possibilities of bankruptcy or a debt relief order. If any inability to make monthly payments is temporary in nature, the option of making "token payments" for a period may help you to get back into a position where the other options become available later.
If the amount paid is substantial, creditors may not allow an Individual Voluntary Arrangement. This is as your debts can be repaid in a similar timescale to an Individual Voluntary Arrangement. In circumstances like this a debt management plan may help debts to be resheduled to enable affordably and completely repaying the debts within a genuine timescale.
Where a reasonable monthly payment is affordable (a sum of £150 per month and upwards perhaps), you should look at how long a debt management plan would take to deal with the debts that you have. If it is excessive an IVA may represent a compromise that will enable your creditors to achieve a part-settlement and assign you to get back on your financial feet within a few years. In these circumstances bankruptcy will also be an option for you which could possibly have a shorter payment term than an IVA. However homeowners and certain professionals may feel that an IVA offers them greater protections.
Another factor to be contemplated on for debt advisors is the sort of employment the client is in. Insolvency (a bankruptcy, IVA or DRO) may formulate issues for professionals like accountants who rely upon memberships of professional bodies. Police officers and members of the armed forces may need to abide by certain procedures before selecting any of the options. People who hold a job in the financial services sector and their role involves cash handling should check their employment contracts.These restrictions do not apply to informal debt management options.
Throughout this piece we aim to go into detail about some of the essential information and figures that debt advisers look for when working to form the best debt resolution options for their client. The content is not relevant for residents of Scotland; they have a distinct but comparable list of options to choose between.
The amount of unsecured debt a client is in matters to the debt advisor when considering which debt resoloution alternative the client should go for. Bank loans, store cards and credit cards are recognized as unsecured debts, considering that secured debts would be things like your mortgage or hire purchase on a car. Fiffteen thousand pounds is the minimum amount for an IVA which is quoted by IVA companies, more recently there are some companies that look at lower debt levels than £15,000
If your debt is lower than this amount, an appropriate option may be a debt relief order, a debt management plan or bankruptcy.
Your assets are also important to debt advice professionals. Common examples of such assets might be equity in your house or a vehicle of significant value that is owned without finance owing on it. If your assets are of a value in excess of your unsecured debt it's likely that the Individual Voluntary Arrangement and debt relief order options will not be appropriate or available, although some exceptions might exist. As bankruptcy will likely to threaten the assets themselves most will people will look to other options such as auctioning the assets themselves or rescheduling repayments by the means of a debt management plan. Depending upon your circumstances you may also be able to look at the options of refinancing your assets to repay your unsecured debts.
If your level of assets is lower than your amount of unsecured personal debt you may find that an Individual Voluntary Arrangement is worthy of further consideration. You should be aware that you may be required, if it is possible, to release some of this equity for the benefit of your creditors. Anyhow safeguards are built into this process that should mean your home is safe assuming that you keep up with your mortgage and IVA payments monthly.
Assessing your ability to make payments towards your debts each month is also necessary for a debt or IVA adviser. Should it be the case that little or no affordability for such a payment exists it should alert you to the possibilities of bankruptcy or a debt relief order. If any inability to make monthly payments is temporary in nature, the option of making "token payments" for a period may help you to get back into a position where the other options become available later.
If the amount paid is substantial, creditors may not allow an Individual Voluntary Arrangement. This is as your debts can be repaid in a similar timescale to an Individual Voluntary Arrangement. In circumstances like this a debt management plan may help debts to be resheduled to enable affordably and completely repaying the debts within a genuine timescale.
Where a reasonable monthly payment is affordable (a sum of £150 per month and upwards perhaps), you should look at how long a debt management plan would take to deal with the debts that you have. If it is excessive an IVA may represent a compromise that will enable your creditors to achieve a part-settlement and assign you to get back on your financial feet within a few years. In these circumstances bankruptcy will also be an option for you which could possibly have a shorter payment term than an IVA. However homeowners and certain professionals may feel that an IVA offers them greater protections.
Another factor to be contemplated on for debt advisors is the sort of employment the client is in. Insolvency (a bankruptcy, IVA or DRO) may formulate issues for professionals like accountants who rely upon memberships of professional bodies. Police officers and members of the armed forces may need to abide by certain procedures before selecting any of the options. People who hold a job in the financial services sector and their role involves cash handling should check their employment contracts.These restrictions do not apply to informal debt management options.
IVA Advice Forum is a website determined to providing
accurate and up to date information about an IVA and other UK debt
solutions. We remind you that an article such as this is not personalised debt
or IVA advice as
other important factors exist. If you want to identify the options available
precisely to meet your needs we imply that you visit our
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