What Sort of Debt Management Help is there?

In this day and age, there are more and more people finding themselves in debt – some who are only mildly in the red, and others who are seriously in debt and need urgent help. Luckily, there are a number of services available to them, all of which will provide debt management help which will assist them in getting out of the hole that they currently find themselves in. But what are the different options open to them when it comes to sorting out their overwhelming financial burden and where can they receive advice?

Bankruptcy

When people are in debt, often the first thing that they think of is bankruptcy, but the reality is that this form of solution is rarely an appropriate one. It is the most serious way for people to get out of debt and can have long lasting implications for the person that enters into a bankruptcy agreement. This is because it has a large effect on the way in which they live their life in the future, such as the ability to take out loans and the ability to get a good credit rating.

Perhaps the biggest effect that going bankrupt will have though is the fact that all of your assets will be included in the assessment. This means that those going bankrupt are likely to lose their home and could also lose any other possessions that they have, such as their car. This is not the case in other solutions – such as an IVA – so all avenues should be explored before going bankrupt. Typically, unless you are tens of thousands of pounds in debt, bankruptcy is not the correct decision.

For advice on bankruptcy, the best places to go are either specialist debt management companies or to a free service, such as the Citizen’s Advice Bureau. Both will be able to advise you as to whether to proceed with this course of action, but only the former will actually help you to implement it.

Individual Voluntary Agreement (IVA)

An IVA is essentially the step under bankruptcy – something that has a legal framework in place but that does not hit the person quite as hard as bankruptcy does. This means that it is the best option for almost all those considering bankruptcy instead, as it can incorporate debts of a much lower amount. There are a number of reasons why this is more suitable…

The main reason for an IVA usually being more suitable is the fact that those that take one out will not lose the assets that they already own. The worst case scenario will be that they lose some of the equity that they have in their home, but at least they will still have a roof over their heads. There is also no chance of losing assets such as cars and other valuable possessions. This means that, although the process is stressful, it places much less of a burden on the person than bankruptcy.

The other main difference between an IVA and bankruptcy is that an IVA is far more private. Many people prefer them because of the stigma attached to bankruptcy – after all, getting an IVA ensures that your name won’t be published in any of the local newspapers! Peoples’ personal pride often plays a large role in the way that they conduct themselves financially.

Any IVA specialist will be able to give good debt management help in this area. There are many to be found on both the High Street and online.