Good financial planning can help to reduce stress, save money, raise your credit score and potentially make low-interest rates on any future credit available to you. But what happens when things don’t go to plan and we start to lose control of our finances?
Firstly you might have to contend with late payment fees from credit cards loans and failed standing orders, which have the knock-on consequence of affecting your credit score. Then in the case of credit cards, if you’re not paying significant amounts towards the money you owe each month, you’ll be owing increasingly more money due to the interest on your debt. On top of all this, you might be hounded with phone calls from debt collection agencies. A low credit score can make it difficult to buy a new home or a new car.
With all this in mind, it’s extremely important to keep on top of your finances and not allow debt to spiral out of control. If you do unfortunately find yourself in such a position, a good course of action is to approach a debt management agency. Debt management agencies can help you find a solution to your debt problem and help to get your finances back on the right track. A Debt management agency will assess your financial position and offer you advice on the repayment options available, potentially contacting creditors on your behalf to arrange a debt management plan. One such debt management agency is the Debt Support Service, they are only a phone call or email away and are ready to help you tackle your debt.
A debt management agency works with a debtor to establish how much money they have incoming and outgoing, and how much they can reasonably afford to pay towards their debt each month (after expenses have been taken into account). The debt management agency will then draw up a budget plan that includes regular monthly payments to your creditors. This monthly payment is received by the debt management agency, before being distributed amongst your creditors. Some agencies are non-profit, or charge non-fee rates and if this is the case all the money from monthly payments go directly to paying off your debt. A significant benefit of a debt management agency is that they can negotiate with your creditors to reduce or possibly even waive your interest rate.
An IVA is one of the debt solution plans available. They can be an alternative to bankruptcy, and consist of a formal arrangement between you and your creditors. An IVA can be very flexible when compared with other debt options, adapting to your changing circumstances. The terms of an IVA can last up to five years and will remain on a debtor’s credit file for six years from the time that an IVA is initiated.
So how does an IVA impact you?
YourJob – It should have no direct impact unless you are a solicitor, an accountant, or work for a law firm. You can always check with an HR department to see if an IVA has any bearing on your position.
Assets – You will need to disclose all assets that you have to an insolvency practitioner. Non-disclosure of assets at this point would be a violation of the law. Your insolvency practitioner will decide whether your assets should be included in the IVA, or if you can keep them.
Future income – Any future income that you may receive such as money received from the sale of a house, any windfall, an increase in your income, any inheritance or gift, should be disclosed and may then be included in your IVA.
If you wish to take that first step towards becoming debt-free – Contact The Debt Support Service today.