Debt Management In The UK Has An Option No Other Country Has

Debt is a part of life that we all must deal with to a greater or lesser extent. Some people are better at handling their debts than other people and are able to stop debt before it gets out of hand. Other people for whatever reason have more trouble with keeping debt at a reasonable level. These people get in over their heads and sometimes can see no way out. There are, however, various ways to deal with these financial problems and in the UK debt solutions companies can offer an option that is not available in any other country.

Some people in the United Kingdom choose to use an IVA or individual voluntary arrangement to get out of serious debt situations. There is no other country that has this option available to help you with your finances. It was introduced by the UK government over twenty years ago and has become a commonly used solution to a financial crisis. There are rules that apply to an IVA, so not everyone will be able to use this method to help them with their problems.

People must owe at least 15,000 pounds to more than one creditor in order to be able to set up one of these arrangements. They must also have some available income so they can meet the monthly payments that will be required under the IVA. An individual voluntary arrangement is binding among you and your creditors, so is much more formal than other types of repayment plans provided by debt management companies. If three quarters of your creditors vote to set up the arrangement then the others must sign up too.

Your creditors will no longer bother you with harassing phone calls once the IVA is set up. You will make a monthly payment that is within your means and at the end of the arrangement any money that has not been repaid has to be written off by each creditor. It is more than just stopping the interest charges, it is actually writing off a large part of what you owe. You might be wondering why creditors would agree to this arrangement. The number one reason is they know if your debts are so bad that you have to file for an individual voluntary arrangement then you are not far off from filing bankruptcy. They would rather get a small part of their money than risk getting nothing at all if you go bankrupt.

Since not everyone with UK debt problems will qualify for an IVA, there are other means available at your disposal too. Debt management plans in UK will help to get you out of debt as well, provided that your debts are not so huge that it is actually impossible to repay them all. These plans are set up by debt management companies in the UK in the same way as they are in the US or anywhere else. The company will contact all of your creditors and see if they can get the interest rates drastically reduced. Usually credit cards are a big culprit when it comes to debt. People tend to misuse them and the interest rates on these cards are extreme. With the help of a specialist advisor you will be able to get those high interest rates reduced significantly. You will pay back all of the principal but not all of the interest. This will save you plenty of money. You will make a monthly payment to the debt management company who then pays your creditors.