The Essential Guide to Managing Debt and Avoiding Bankruptcy
The economic turmoil experienced in the UK recently has led to a huge increase in consumer debt problems. While bankruptcy may seem like a desirable option to many people, it is not without its own pain. Bankruptcy does provide legal protection from creditors, but it usually involves the loss of property, consequences for long-term credit-worthiness and various employment implications. Before such a drastic step is taken, people should explore the possibilities of getting professional help with debt. There are debt specialists in the UK who are helping thousands of people take control of their finances, and that can mean a brighter future, free of financial turmoil.
The First Steps in Taking Control of Debt
Far too many people in the UK live in the hope that, over time, their creditors will stop phoning, sending aggressive letters and knocking on the door; unfortunately, this never happens. In fact, by refusing to face facts, many people are actually making their debt problems worse. By talking to a debt help specialist, someone living under the shadow of financial misery can take the first steps to a new life.
What Does Debt Management Entail?
The first stage of formulating any debt management plan involves the completion of a debt budgeting calculator;only by ascertaining a person’s incomings and outgoings can a reasonable monthly repayment figure be arrived at. A scheduled plan of repayments can then be negotiated with individual creditors based on the findings of the budgeting calculator. It is usually far easier for consumers to get a debt management company to perform this role, as specialists will be experienced in getting the best deals possible.
When a person has debts of over £15,000, it may be possible for an Individual Voluntary Arrangement to be instigated. For those people who have a regular income and who owe money to at least three different creditors, this is an increasingly popular option. However, those in Scotland have an extra option of trust deeds, which are repaid over the course of three years.
People who are in steady, long-term employment may be advised to take out a debt consolidation loan. This should be done with great caution, however, as it often involves borrowing even more money than is owed – particularly when interest is factored in. A relatively new option to consumers is that of the Debt Relief Order (DRO). Where an individual has more than £15,000 of debt, no assets and a monthly disposable income of less than £50, such an order can be granted. The order lasts 12 months, and the obligation to repay debts is removed if the individual is still in the same financial situation at the end of that period.
Only when all of these options have been exhausted will a debt help specialist recommend bankruptcy. Too many people choose bankruptcy as the first option, yet it should always be the last. A debt specialist will be able to talk a client through all of the available options in order to tailor a repayment solution that suits both the person’s income and essential expenditure. Managing and repaying debt is a legal minefield, so seeking advice from specialists who deal with debt problems on a daily basis will steer people in the right direction – and towards a better life.
1st Point Debt Solutions offers debt management solutions to help you resolve your debt problems. If you require help on your payday loan debt, please visit - http://www.1stpointdebtsolutions.co.uk