Debt Solutions For UK Consumers

 

Dealing with debt is never easy, but if you've gotten behind in your bills and you've accumulated debt, you need to deal with it at some point. Fortunately, no matter how much debt you have, there are options. There are things you can do to deal with your debtfor once and for all, and start yourself back on a positive track in regards to your finances.

One of the best debt solutions is a consolidation loan. A consolidation loan allows you to take all the different debt you owe to different creditors and basically compile it together into a single loan. This saves you a lot of time and hassle, by not having to deal with various different debts and instead just have a single payment to worry about each month. It also saves you money in most cases, because you only have a single debt with interest, rather than several.

Scottish Trust Deeds

Scottish Trust Deeds are another option. These are voluntary but formal arrangements available to Scottish residents, and are an alternative to bankruptcy as a way to clear debt so you can get back on your feet financially and be smarter about your finances in the future. You do need to meet certain criteria in order to apply for a Trust Deed. There are zero set up fees, you can immediately stop creditors from contacting you, and you can prevent legal action from being taken against you.

Individual Voluntary Arrangements

Individual voluntary arrangements or IVA is another of the more common debt management solutions. This is typically only an option if you have a small amount of debt, but creditors often prefer this method because the return to them is much higher than what they would receive if you were to file for bankruptcy. It is similar to a Scottish Trust Deed but the criteria is slightly different. You must owe at least 2 creditors, be in over £15,000 worth of debt (£10,000 for a Trust Deed), live in England (Trust Deeds are Scotland only) and you must be able to afford £200 or over towards your debts (£150 for TD's). So as you can see the criteria is slightly higher but the end result will be the same... you will become legally debt free. If you would live to apply for IVA then make sure to do your research first to make ensure it is the right debt solution for you.

Bankruptcy

You could claim bankruptcy or insolvency as its sometimes referred to, which is a good option if you have accumulated a large amount of debt and don't have the money to pay all your creditors off. Although bankruptcy does have a very negative effect on your credit rating, it's often the only choice when you've gotten in over your head. As soon as you file for bankruptcy, your creditors are notified and you will stop receiving harassing calls, you are released from your debt obligations, and is a most cost-effective debt solution than other options, such as payday loans and debt consolidation loans.

Debt Arrangement Schemes

Debt Arrangement Schemes are also an option for dealing with debt, a statutory scheme with the aim of helping debtors pay off multiple debts by giving them more time to make payments. This is an ideal choice if you are able to fit payments in, but just need more time to cover the costs.

With all these options, you can make the right move and deal with your debt appropriately. If you're still not sure, you can talk to a financial advisor or other expert, who can talk with you about your current financial situation and offer you helpful advice. It's important to thoroughly understand what your options are before you can expect to make a decision at all, let alone the right decision.