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Debt Solutions

How Much Can You Afford


Debt Solutions . . .

At times it may seem like there is no way to get out of debt. That the bills will keep coming and the credit card debt continue to mount.

But there is a way out.

And whatever your situation, however bad things seem to be, we can design a solution tailor-made to your needs. A solution which not only takes care of your immediate problems but provides a long term programme to help you regain control of your life.

Whilst any solution is designed to meet your specific requirements, it will fall into one of four categories:

  • Consolidation Loans
    This sort of loan is used to consolidate your existing debts into one single new loan, with lower monthly payments. The payments being lower for two main reasons:
    (a) The loan is spread over a longer period of time than your existing debts
    (b) The interest rate being charged is less than the average rate on your current debts.

    Whilst this is not the answer for many people, it can be a useful tool during a period of low interest rates, or when there is sufficient equity built up in a property so that a second mortgage or remortgage can be arranged.

    Consolidation loans should be avoided by serial consolidators, those who repeatedly consolidate ever larger amounts of debt usually including previous consolidation loans.


  • Debt Management
    For those who do not wish to refinance their existing debts, the alternative is to approach the creditors in hope of reducing the monthly payments. This is most effectively achieved through the use of professional debt managers.

    A financial statement will be taken to discover what money you can afford to pay your creditors after living costs and overheads are paid for. This surplus is then divided amongst your creditors on a pro-rata basis and offered as part of an informal arrangement.

    Because debt management arrangements are informal they can be cancelled by any one of your creditors at any time. Whilst this is a risk, using the services of a reputable debt manager will bring gravitas to your case and ensure that any arrangements are more rigidly observed. Additionally, reputable creditors know that should circumstances deteriorate to the point that a County Court Judgement or an Individual Voluntary Arrangement is issued, the court would not look too kindly on creditors who had exacerbated the debtor's problems.


  • Individual Voluntary Arrangements
    This is the formal alternative to using a debt management company. A financial statement is produced and a surplus which can be paid to your creditors is calculated.

    To get an IVA in place, 75% of the creditors need to agree to the terms and conditions of the arrangement. Get their agreement and the arrangement is set in stone, an improvement over the informality of a debt management plan. In addition interest charges will be stopped and a proportion of the overall debt may be written off.

    But there is a downside. The process of getting an IVA in place can take two to three months and there are large administration fees, which can run to a two or three thousand pounds. Additionally, it is primarily useful for unsecured debt only and given the fees that can be charged, only practical where debts exceed £15,000 or so.


  • Bankruptcy
    The most extreme option available but one that should be considered, particularly if things are really bad. In certain circumstances it can be the best option. But once you are declared bankrupt you are likely to be locked into it for many years. The long-term ramifications of which include: being unable to access credit, be in certain types of business or open a bank current account.

Now we must ask, How Much Can You Afford?

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