Debt Solutions in brief

Our partners at Debt Help UK offer a 'best advice' service covering all debt solutions. This means that they analyse your financial position for you during a free in-depth telephone consultation. They are then able to explain all the available options open to you, whilst helping you to understand each debt solution and the benefits each solution would bring to your personal financial circumstances. Here's a brief outline of each of the available debt solutions -

• Debt Consolidation Loans
A consolidation loan will enable a person to restructure all their existing debts into one low, affordable monthly payment. Consolidating debts into a single loan generally benefits people who are struggling to keep within their monthly budget. A consolidation loan is usually the primary option for people struggling to maintain a monthly budget, as it is generally the easiest way to bring a budget back under control. However, in some situations, borrowing more money through a consolidation loan is not the answer. Taking professional debt advice at this early stage can save so much heartache later on.

Read more about consolidation loans


• Debt Management Plans (DMPs)
Debt Management Plans offer a solution to people who find themselves with a temporary inability to afford their debts. This maybe due to a temporary loss of income due to sickness, unemployment or redundancy, as well as a host of other reasons. A Debt Management Plan (DMP) gives a person the opportunity to offer their creditors a reduced payment towards their debts whilst they are unable to afford their regular monthly payment. A Debt Management Plan (DMP) would normally suit circumstances where the person's combined debts amount to less than £15,000, or where there is a strong chance the total debt can be repaid in full within 5 years.

Read More about Debt Management Plans (DMPs)


• Individual Voluntary Arrangements (IVAs)
Individual Voluntary arrangements (IVAs) offer people with debts over £15,000, owed to more than 3 different creditors, a chance to reach a 'formal' arrangement to repay their debts. An IVA is a private agreement that allows a person to pay back to their creditors what they can genuinely afford each month, after their living cost have been accounted for. Payments continue for a fixed term, which is usually a 5-year period, after which time all their unpaid debts are written-off. This debt write-off will depend on each individual case, but can be as much as 60% or 70% of the total debt. It is often seen as a suitable alternative to bankruptcy for people looking to protect a property where there is an element of equity. Also, an IVA will offer protection to those people whose profession would rule out bankruptcy as a solution, such as members of the Armed Forces, the Police Force or professionals working in the financial services.

Read more about Individual Voluntary arrangements (IVAs)


• Re-mortgages
Sometimes, by using the equity held within a property, a person can clear all their unsecured debts. By re-mortgaging your asset, and restructuring your debts in this way, it is possible that significant savings can be made to a tight monthly budget. However, the longer term repayments may prove not so beneficial and, therefore, it is always prudent to explore, and understand, this option fully.

Read more about re-mortgaging.


• Bankruptcy
Bankruptcy as a debt solution is generally considered the 'last resort'. However, after the recent changes in the 'Enterprise Act', where significant changes were made to the bankruptcy process, more and more people are exploring the bankruptcy option. Although the bankruptcy process has been modified substantially with, among other things, changes to the time a person is 'held bankrupt' reduced to 12 month in most cases, it still remains a serious business and, therefore, receiving profession debt advice on the subject is essential.

Read more about bankruptcy.

If you wish to find out which solution is best suited to you, Debt Help UK have put together a simple online tool called The Debt Detective that helps you find the best solutions to your debt problems. Use this as a guide to find the best solution for you.

The Debt Detective.

Alternatively you can Call free on 0800 088 7502 to speak confidentially to a professional debt adviser at Debt Help UK to discuss your debt problems and find the best solution.