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Debt Management Solutions

By: Gareth Chidgey

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Debt Management Solutions

If you are struggling to pay off your debt, an Individual Voluntary Arrangement or a Debt Management Plans could be the answer. Apart from those who work in the debt management industry, most people have no idea what these are or how to go about arranging them. Do you need help with your debt? Having two or more credit agreements and a monthly deficit is more than enough reason to consider debt management.

Whether you are struggling with all your debts, or just the one, everything will count towards your plan. The way debt solutions work is to share the payments proportionally to the amount owed to all creditors.

When considering Debt Management and IVAs, many people find themselves unsure if they qualify for. Most people reading this are unsure of the specific differences between these, so I am hoping to outline the two and help you to make a more informed decision.

Debt Management Plans

The debt management industry is regulated on a voluntary basis by The Debt Managers Standards Association or DEMSA.

DEMSA is approved by the Office of Fair Trading (OFT) and ensures that its member companies treat their customers fairly and honestly. Fees must be explained fully before any client commits to anything. As of September 2009, DEMSA has only 7 approved members.

Fees should normally be included within the monthly payments made to the debt management company. The payment must be assessed based on your circumstances, not what you owe. You should not be asked for any money up front, any fees must be paid as part of your monthly payment.

Many companies falsely claim to be able to write off large chunks of debt. Interest and charges are more likely to be frozen due to companies having relationships with creditors.

You do not need large amounts of debt to qualify; debts of even a few hundred pounds can be enough to warrant help. Those companies listed on the DEMSA website will be able to advise you as to your qualification for any of these products without cost.
IVA

Unlike DMPs, IVAs are mandatorily regulated. However, that process is more confused as there are seven possible regulatory authorities. A registered Insolvency Practitioner should be employed by the company who choose to oversee your IVA.

Your debt will be cleared much faster with an IVA, usually in 5 years or less. To arrange this, large amounts of your debt can be wiped out, however, there are strict processes in place for you to qualify including minimum amounts, minimum creditor numbers and minimum levels of income.

IVAs can take up to 3 months to put in place and will affect your credit file much more than a DMP. You will be much better off credit reference wise than if you declare bankrupt.

Owing more than ?10,000 may be enough for you to qualify, speak to an expert for more information.

Professional Debt Advice

Make sure you understand any plan you are presented with by speaking to an expert debt manager. Many of the companies listed on the DEMSA website will have an IVA part of the company and will be able to provide good advice one way or another.

I hope this helps.

Article Source: http://depositarticles.com/

Information provided by Gareth Chidgey of Debt Management Providers, Chiltern Debt Management

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