Debt Solutions – Your Choices to Get Out of Debt

Many Britons wake up every morning dreading the thought of having to answer the phone or look at the mail. The reason for this is that they have found themselves so far in debt that they can no longer pay the bills and are now becoming further and further behind in their payment. If this sounds familiar, you are not alone as there are millions of people just like you trying to come to terms with the fact that they lived too high on the horse for too long and now that bill has come due they can no longer afford to make the payments. However, there are a number of debt solutions available to you that can help.

Free Help

In the UK there are several different organizations sponsored by either the government of by charity that are there to help you find the best debt solution for your situation. These organizations include the Consumer Credit Counseling Service, the National Debt Helpline and the Citizens Advice Bureau. In most cases they can provide you with a plethora of information regarding the different debt solutions available to you and guide you in the right direction.

A Debt Management Program

There are many different companies such as Advanced Debt Solutions who can help you with a debt management program. This program is for those who owe less than £15,000 and can still afford to make some kind of payment. The debt management company will try and negotiate with all of your creditors to reduce the total amount you owe and thus reduce your payment to something more affordable, many DM companies now let you make one single payment to them and they pay your creditors.

This program will only work if all of your creditors will agree to reduce your total indebtedness and lower your payments. If they will not agree or if the amount you owe is more than the £15,000 limit you may have to go with an IVA instead.

The IVA

The IVA or Individual Voluntary Agreement is similar to a debt management program but is used when you have over £15,000 in unsecured debt. You must owe at least three creditors and have a full time job that leaves you with at least £200 left over after all of your monthly bills are paid. The Insolvency Provider or IP in charge of your case will contact your creditors and negotiate with them to accept your IVA proposal. By law as long as 75% of your creditors agree to the program the rest must accept the terms.

One of the big selling points for an IVA is that in most cases your debt can be reduced by at least 50% and in some cases as much as 75% leaving you to pay only 25% of your original debt. You will also be debt free in 5 years with this program. Companies like Global Debt Solutions offer these programs as a way to help you pay off your debt in an affordable manner so that you can get back to enjoying your life.

Debt Consolidation Loan

This is one of the most common debt solutions being used today. In essence you are borrowing enough money to pay off your existed unsecured debt, leaving you with one simple monthly payment. Generally speaking you should be able to secure a lower interest rate than your credit cards and you monthly payment will be less than the sum of your credit card payments, leaving you able to afford your payment more easily.