Need Help With Debts? Consider a Debt Company
If you are up to your neck in debt and barely treading those financial waters
, the services of a debt company may seem attractive. Indeed, there are several companies in the UK that do help its customers. However, do you know exactly what these entities actually do? It is important to know what they offer so you can make the right decisions for your financial future.
Debt Counselling
Depending on your debt load, you may only need guidance as to how to handle your finances. Perhaps you can manage to pay your debt, however just barely, or you have an unforeseen expense that now has you behind on some bills. A debt counsellor can evaluate your lifestyle, bills and monthly budget to help you find ways to save money to pay down debt faster. They may even provide some helpful advice on how to handle collectors when they send letters or call your home.
Debt Management
Debt management involves not only counselling but also actual dealing with your creditors. A debt company may negotiate with your creditors to reduce your payments based on your current ability to pay. They also may be able to work with creditors to freeze or reduce interest and perhaps even negotiate a settlement for a fraction of the total amount. While debt management may not always get rid of those collector calls for you, peace of mind may be gained by having a workable plan in place to pay off your debt over a finite number of months or years.
Individual Voluntary Arrangements or Informal Arrangements
You may have huge bill that has been giving you trouble and your creditor will not work with you. A debt counsellor may help you set up an informal arrangement with your creditor to get your bill paid. It is not a legal arrangement but the counsellor could help you set up a workable payment plan that fits your budget. With an individual voluntary arrangement or IVA, the arrangement would be legally binding. Typically, part of an IVA would be an agreement to not only pay an agreed upon percentage of your debt, but also creditors would agree not to write or call you regarding your debt during the arrangement period. It would be up to you to adhere to the IVA to ensure compliance.
Debt Consolidation and Avoiding Bankruptcy
Sometimes, people need help with their bills, particularly when the interest alone is killing them. Consolidation of debt is an option, particularly if your credit is good enough to secure a loan against property you own. A counsellor will advise you that this is only a viable option if you can commit to not adding to your debt load and be willing to risk your property should you default on the loan. Bankruptcy is a last resort for many people in debt and counsellors will work with you to create a budget and analyze your finances to try and find alternatives before bankruptcy is even considered. Once you file, your credit rating is ruined for years to come and the stigma will follow you everywhere from finding affordable housing and transportation to applying for a new job.
Everyone has some type of debt. However, if you feel that you simply cannot get ahead, it is ok to ask for some help. A good debt company will work with you and lay out all your options so that you can make the best informed decision for your financial future.
Need Help With Debts? Consider a Debt Company
By: Chris Jenkinson
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