Debts won’t disappear No comments yet

Rule one and the most important rule of all with growing debts is confront them, concede that you need to do something about them and wherever possible stop them from growing any bigger. Keep together all the letters and statements you receive from your creditors and get together a list of all those to whom you owe money and how much.

From this point you can prioritise those which need to be paid. These are the most essential; your mortgage or rent, fuel costs, any outstanding court fines or money to a partner for child maintenance. Keep up with these payments to prevent your debts damaging your life, to prevent you losing your home or having fuel cut off.

Non-priority debts are all the others; credit cards, overdrafts, student loans and benefit overpayments. You then need to sort out your budget, any money left after essential expenditures (essential are only those things that are necessary to live – rent or mortgage, food bills, household costs etc.) After this you will know how much you have left to pay off your priority debts, if it isn’t enough show it to your creditors, attempt to come to an agreement. If you have more than you need, arrange to pay more off each month until these priority debts are cleared. Your non-priority debts can be dealt with in much the same way, if you have money to spare you can begin to pay these off simultaneously with your priority debts. You can apply for an administration order or for an IVA.

If you have no money left after considering your budget there are very few options, either applying for bankruptcy or asking your creditors to write off the debt. Whatever you do, debts will not go away they will merely get worse, the most important step is confronting them and starting to work towards a solution and a debt free life.

What is an IVA? No comments yet

Today, we find ourselves in an ever deteriorating economic climate. This means that many more people are struggling to meet payments and in turn have large amounts of debt to contend with. Luckily, there are means in which these problems can be eased.

One method is an Individual Voluntary Arrangement (IVA). An IVA is a legally binding contract between you and your creditors which aims to reduce the amount of money you have to repay. You will find that it is a good way to stop any further interest charges and to reduce your monthly payments. Consequently, you will have more money in your pocket at the end of the month in which to spend on other things.

Although IVA’s are an excellent solution for some, they are not always the best for everybody. Therefore, there are criteria which you must meet to be eligible:

•    The debt is over £15,000.
•    The debt is owed to three or more different creditors.
•    You have figured out a sensible, realistic budget that you will be able to stick to in order to make my payments, allowing enough to pay for everyday basic needs, bills and general living costs.
•    You are in regular employment with a steady income.

If you do not meet the above criteria then it is likely that an IVA is not the ideal solution for your debt problems. Even for people who do meet the above criteria, it is always advisable that you arrange a meeting with a debt advisor first as they will be able to inform you more about an IVA and any other available options. So there you have it, ‘what is an IVA’ in a nutshell.