Debt advice: is it the same for everyone?

12 May 2009

For anyone struggling with debt, getting debt advice at the earliest opportunity is vitally important. The right guidance or debt solution can make a big difference to the borrower`s ability to repay their debts - and the sooner action is taken, the less difficult it is likely to be.

No two people in debt are in exactly the same situation. As a result, there are a range of debt solutions available, each designed to help people in different situations. A professional debt adviser can help you make the right decision on how to tackle your debts.

Debt advice for different situations

Many people who are struggling with debt may find that their problem can be solved more easily than they expected. In many cases, simply cutting back on some expenses or drawing up a budget could help you to organise your finances more effectively, which could give you extra `room` to deal with your debts.

However, if your situation is more serious, you may want to consider a specific debt solution. Your debt adviser can help by advising you on the best debt solution for your circumstances.

For example, if you are dealing with multiple debts and would like to simplify your finances and/or reduce your outgoings, then a debt consolidation loan could help. Typically, debt consolidation loans are most suitable for people who can manage their debts under the existing terms, but would feel more comfortable repaying the debt in smaller instalments, and to only one creditor instead of many.

If your situation is more serious and you feel you are unable to repay your debts under the existing terms, then a debt management plan may be your best option. This is an informal agreement between you and your creditors in which you will repay your debt at a slower pace than originally agreed when you first borrowed the money.

If you simply cannot see yourself ever being able to repay your debts in full, then an IVA (Individual Voluntary Arrangement) could help you to avoid bankruptcy. On an IVA, you will agree to repay a percentage of your debts to your creditors over a fixed period (normally five years), after which your remaining debt will be written off.

Naturally, each approach has its benefits and drawbacks. For more information on the various ways of tackling your debts, contact one of our expert debt advisers on 0800 074 8639.

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