Types Of Services
Debt management UK
Debt Management is a system to help those in debt become debt free. A Debt
Management Plan is often a simple, systematic way of dealing with your debts. All your
debts are consolidated into one simple, monthly fee which you pay to a company who
manages your debt. The debt management compnay will then distribute this to your creditors.
In almost all cases your chosen comapany can negotiate withyour creditors to lower, or
even freeze, interest rates. This can mean a reduction of up to 75% on your monthly repayments.
The debt management company can also take over all communication with your creditors in order to help relieve the stress of debt.
Debt Consolidation UK
If you make monthly repayments to multiple creditors, one option is to apply
for a debt consolidation loan. The principle behind this is that you borrow a
large, lump sum to repay your creditors and are then left with one creditor and
one monthly repayment. The idea is that the repayments on this single, larger
loan will be lower than the sum you are currently paying. It works very well if
you can easily afford the repayments and are just looking for a way to simplify
things and bring down the interest rates.
However, there are many people that struggle to meet the repayments each
month. Some of these even find that their outgoings each month exceed their
income. For these people, a debt consolidation loan will not actually get them
out of debt. In cases like this a debt management plan may be more suitable.
This will also consolidate all your repayments into a simple monthly payment but
it does not involve taking out another loan and, if followed, it will actually
help you become debt free.
Individual Voluntary Arrangement – IVA
An Individual Voluntary Arrangement (IVA) is a formal agreement between a
person and their creditors. If a person cannot make their repayments in full but
are able to pay something each month then an IVA proposal can be established.
This proposal sets out exactly what the person will pay their creditors each
month.
