In England and Wales (slightly different rules apply in Scotland) there are a variety of Debt Solutions available. The option that you use will depend on your total debt, your personal circumstances, your job and your own personal preference.
We suggest you investigate the following free, charitable and government options first:
In no particular order of preference, we also recommend you look at all the following methods:
Debt Consolidation
debt consolidation or loan restrucuring usually means taking one loan, large enough to pay off all your existing creditors, and then making a monthly affordable payment to one company. Through restructuring your debts you can often find that you have much more financial freedom, because you're not paying interest to lots of different lenders. It can also mean a larger loan through fees and commission and paying back more money in the long run
Debt Management Plan
generally suited to those with low debt amounts. It's a short-term solution for individuals seeking time to get back on their feet or currently struggling to manage their debt. It is NOT a legally binding contract. It's an informal agreement with creditors, to reduce your monthly payments. You still normlly have to pay your debt in full, so reducing your monthly payments will increase your length of repayment and maybe the amount payable. The idea is that there is a reduction in your outgoings (and maybe a freeze on interest) to help you take control of your finances
Debt Settlement
you may be able to make a lump sum payment of a proportion of your unsecured debt owed to creditors. The level of the reduced settlement is dependent on the creditors and your individual circumstances. IF creditors agree to a lump sum settlement they write off any outstanding debt.
An Individual Voluntary Arrangement or IVA
legally binding contract between you and your creditors. Usually means you can be free from unsecured debt within 5 years. Your creditors can legally write off up to 75% of your debt. You could end up paying back less than you actually owe.
Bankruptcy
considered as a last resort. Offers various advantages in that creditors will no longer be able to pursue you or take action against you to recover what you owe and you can expect to be discharged from personal bankruptcy after 1 year and could then be free of debt. However, amongst other things, there will usually be a fee to pay with your application, you can't involved in the day-to-day management of a limited company and your credit rating can be affected for many years after the annulment.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage
The FSA does not regulate Debt advice
On clicking any external links, you will depart from the regulatory site of The Money Works. Neither The Money Works nor Sesame Ltd. is responsible for the accuracy of the information contained within the linked sites
WHAT IS DEBT?
money, services, goods or anything of value that is owed by one party to another party as the result of a previous agreement. For most people, consumer debt means credit card loans, personal loans, mortgages and overdrafts
WHICH DEBT
SOLUTIONS COMPANY?
The right company can help you resolve debt issues and problems and take some of the strain of the burden of debt
Please contact
The Money Works for full confidential details of this service
Sesame and The Money Works have teamed up with INVOCAS FINANCIAL, to offer you a full range of DEBT SOLUTIONS.
Before referring you to INVOCAS FINANCIAL Services, we will ensure all other appropriate possibilities for you as our client. We will include full details of options considered and why these were unsuitable
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