If you’re struggling to keep up repayments on your personal loans, credit cards or other financial commitments you may want to consider debt management solutions. Whether you have a moderate amount of debt or a more sizable sum, worrying about your monthly outgoings and avoiding calls from creditors can make life miserable. A tailored debt management solution can put you in control of your finances again, relieve you of pressure from creditors and restore a sense of hope.

Approaches to Debt Management

There is no single approach to debt management that works for every consumer. Finding the proper solution to your financial difficulties requires a consideration of the amount you owe, the nature of your commitments, your current resources and your expected future earnings. When you sit down with a credit counselor to discuss these factors, you can develop a strategy that will allow you to reduce and repay your debts within a realistic time frame.

A trusted credit advisor will review your options with you to determine which approach to management is most suitable for your circumstances. For some consumers, a home remortgage offers an escape from debt. With a cash back remortgage, the equity that you have in your home is used as collateral for a loan, which can be used to pay off high interest credit card bills, student loans, medical loans and other unsecured debts. However, you must be certain that you can repay the loan, or you will risk losing your home.

Alternatively, a debt management plan may be recommended as a means of repaying your unsecured loans. Reliable debt management companies can make arrangements with your creditors to repay your loans within a certain period of time, often at a lower interest rate. The client then pays the company a set sum each month, which is distributed to the client’s creditors. The company generally charges a fee in exchange for this service. When working with a debt management company, it is important to choose a reliable, trusted service.

If your financial circumstances are more severe, an IVA may be a more appropriate approach to management. An Individual Voluntary Arrangement, or IVA, is an alternative to bankruptcy that lowers your obligations and allows you to repay your debt over the course of a 5 year arrangement. This form of personal financial management allows you to keep your home whilst paying off your debt at a reduced rate. This reduction is determined in a settlement between you, your creditors and your Insolvency Practitioner, or IP.

An IP is in charge of the management of an IVA, from the beginning of the agreement to its conclusion. As part of the settlement, some consumers pay off the remainder of their obligations through an IVA remortgage. An IVA remortgage releases the equity that you own in your home to your creditors, freeing you from further obligations to these institutions.

Bankruptcy is recommended only as a last resort. Because a bankruptcy will have a more serious, long lasting effect on your credit rating than other forms of management, most advisors suggest that this measure be reserved for those who have no other recourse. In some situations, such as debts resulting from a severe injury, prolonged disability and overwhelming medical bills, bankruptcy is the best approach to management.

Debt Management Advisors

In our current economy, adverse credit is far from unusual, and many consumers find themselves overwhelmed by their finances. You may have been made unemployed due to a redundancy, illness or disability. You may have lost a spouse who was the primary wage earner for your household. You may have simply taken on too much debt at a time when you couldn’t afford to keep up with your bills. Regardless of the reasons for your situation, you’ll find that it’s much easier to find a solution when you work with a knowledgeable advisor.

A qualified credit counselor will review your income, your assets and your liabilities to help you to determine which solution is best suited to you. If you can afford to repay a certain sum each month, a debt consolidation loan or a repayment plan may be the best option for you. For more serious debts, an IVA may be more appropriate. If you have inherited a sum of money or received funds from the sale of a house or an automobile, a full and final settlement of your obligations may be arranged, reducing your obligations considerably.

Poor credit no longer carries the social stigma that it once had. These days, many consumers struggle with obligations that they can no longer meet. Rather than worrying over phone calls and threatening letters from creditors, or avoiding the problem by ignoring bills, work with a qualified agency approved by the Office of Fair Trading to find a debt management solution.

Professional Assistance in Managing Debt

Kevin J.

Paid off £10k credit card debt in just 24 months

Brittany M.

Consolidated student loans
for one low
monthly payment

Marilyn F.

Will be retiring comfortably in 2011 as she is now debt free

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