What help is available when debt becomes out of control. There are many varied solutions depending on the level of the problem. There is help available for everyone, and there is always a way to improve the situation.
The first step is to make a list of all current debts. Once the total is known then it is easier to request advice. Before doing this make another list of all household expenses so that a realistic budget can be set. Remember to include everything so that it doesn’t cause an additional problem later on, when although all the calculations have been made, it is discovered that no allowance has been made for fuel for the car to get to work!!
Help Available
This depends on the level of debt and also on personal circumstances. What is right for one person could be completely wrong for another. It is really important to get advice on debt and there are many companies which are there to assist. There are various government agencies that can give information, however, remember that their time is limited and it may take several weeks before an appointment is available.
Solutions
No matter how bad a situation is, there is always a way to improve matters. It could well be that if the total unsecured debt is around £15K an informal arrangement made by a Debt Management Company with creditors can resolve the problem. It won’t happen overnight, but monthly repayments may be reduced to enable this debt to be cleared completely over a period of years. Another person with secured and unsecured debts may find that a Debt Consolidation Loan (if the property has enough equity) is the best way forward for them. There is no hard and fast rule. It really does depend on individual circumstances.
High Levels of Debt
For someone with a high level of debt a more formal solution may be required. An IVA (Individual Voluntary Arrangement) can be considered for someone who can’t afford their monthly repayments but wants to avoid bankruptcy. This isn’t something which can be personally dealt with, but there are professionals there to assist. They can make a legal agreement with creditors and up to 75% of the debt can be written off.
There are many things to consider before making any decision as to the best way forward. Don’t ignore the debt by thinking it will go away and take all the debt advice available. Discuss it with a partner, family member or close friend, but remember that there are many people in debt and all for different reasons.