Commercial Feature

Sleepless nights, unpaid bills, creditors on the telephone: debt can be stressful. And in the current economic climate, it’s a problem that more and more of us are struggling with. But even if your unsecured debts seem insurmountable, there’s an array of measures available that could help you to get your finances back on the right track. None of them is easy and they won’t offer overnight solutions. But used carefully and responsibly, one of them could help you get back in control of your debts – and see the light at the end of the tunnel.

One method that might be worth considering is Debt Management. This is an informal agreement negotiated between you and your unsecured lenders, often via a trained adviser – check out this information to find out how a debt adviser can help. They will look at your income and expenditure, and work out what you can realistically afford to repay, after living expenses. Your debt adviser will negotiate with your creditors on your behalf, asking them to accept lower payments, which can help ease some of the stress of the situation. But you should be aware that, as you will probably be repaying your debts over a longer period, you are likely to end up paying more in the long run. There’s also a possibility that your creditors may refuse to accept the plan – and finally, making lower payments can have an impact on your credit rating.

Another possible course of action is an IVA (Individual Voluntary Arrangement). An IVA is a legally binding agreement between you and your unsecured creditors that normally involves five years of monthly payments. It is administered by an Insolvency Practitioner (IP), who will call a meeting with all your creditors at which the proposed terms of your IVA will be presented. Again, your creditors are not obliged to agree; and towards the end of your IVA, they may expect you to release equity in any property you own to put towards your debts. However, once the process is completed, you will be free of your unsecured debts.

If you’re worried by debt, you’re not alone, and there are ways forward: just be sure that when you choose yours, you make a careful and fully informed decision.