Too Deep in Debt?

The title of this post might hit home for a select few. Debt is a very real problem in the UK and other western countries with the majority of the population carrying significant debt on an array of credit cards, personal loans and mortgage agreements. Of course having a debt portfolio is nothing new and for the most part, it doesn’t cause too many problems. In fact, having a bit of debt against your name is actually a good thing as it shows you’re what are known as a good risk. This is providing you can make the payments on your loan of course. If you have debt and don’t keep up with the payments, it could land you in a whole heap of trouble.

Unfortunately there are lots of people out there who despite having the best debt management skills and techniques and putting them into practice, they still can’t make ends meets. This could be for a variety of reasons such as job loss, health issues or even the economy as a whole. Once you get yourself into this dire situation, it’s extremely hard to get back out. That is of course without a lot of surplus cash coming your way in the form of a windfall or similar. For those people so severely in debt that they can’t consolidate or make payments on their existing terms, there are very few options.

The most popular option, especially if you’re in £15,000+ of debt is the IVA. So what is an IVA? Well, an IVA stands for an Individual Voluntary Arrangement. When you take out an IVA, it is similar to a loan. Your creditors are paid off in full and you are left with a single monthly payment that you must make each month in order to service the debt.

The IVA is a great alternative when compared to bankruptcy, as it isn’t a permanent mark on your record. It isn’t public and most importantly, it can actually help build up your credit rating to what it once was. This is providing you make all your payments each month on time of course.