debt problems

What is the Future of my Debts if my IVA Fails?

What is the Future of my Debts if my IVA Fails?

If I may ask you, what is an IVA, and then the best answer for it would be, an IVA or individual voluntary arrangement is extensively used for resolving personal debt problems. It is a repayment plan (fixed term) that is designed especially to help someone who is facing a crucial debt problem. This repayment plan gives one the chance to repay the reduced payments to their creditors and protecting their own assets from serious threats of bankruptcy and legal action. This legal agreement came into being on 29th December in the year 1986 as a part of Insolvency Act and it brought major changes in UK as far as personal insolvency was concerned. Normally an IVA lasts for a 5 year fixed period. The term is fixed and once it is agreed upon even a creditor do not have the right to change it.

It has been seen that IVAs have mostly proved to be successful. But they have even failed during certain instances.  There are times when people go for an IVA but discover after a certain point of time that they won’t be able to afford their payments. However, as you cannot start an IVA unless it is actually proved that you are able to make your payments these situations do not usually arise.

In most cases people find it difficult to make their monthly payments when their income unexpectedly falls. This may result from loss of their jobs or new baby or even prolonged period of illness.

What are the options if an IVA fails?

If an IVA fails there are plenty of options that can come to your rescue. Let us have a look at few of them:

  • A Payment Holiday: The first and effective option is to go for a payment holiday. This gives you a break temporary for a period of 2-3 months from IVA payments. This gives you a chance to search any new job or even overtime for arranging the money required for your payments. The payments that you have missed are added to your IVA. The payment holiday option works only when the drop in your income is for a temporary basis. But the drop is permanent then you will have to think of any other variation to the IVA.
  • IVA variation: It refers to reducing your payments that you give for IVA after signing a formal agreement with creditors. You will then have to increase the number of your payments and compensate for your lower payments every month. For varying an IVA you will require the help of insolvency practitioner who will propose variations to the creditors. The proposal gets accepted id it seems to be reasonable.

Future of debts if IVA fails

If certain circumstances arises that you are not able to make payments to IVA then there are chances of its failure.  It may not fail even in such situation if and only the agreed payments have been made by you. But if you are in your earlier stages of payment then there are chances of failure.  It will result in huge debts that may become impossible to repay. In such a situation, the best options are starting a debt management or declaring bankruptcy.

You should go for any option depending on your personal circumstances and after taking advice from insolvency practitioner. However, bankruptcy option is considered better by most people as the payment that goes into any debt management plan is so less that it would literally take years for resolving the debt. It is always an intelligent decision if you do not consider an IVA unless being very confident of the fact that you can afford to maintain your payments.

Why we need to know things related debts and financial difficulties?

Why we need to know things related debts and financial difficulties?

They say there are two things best not discussed in pubs, politics and religion.  I’m here to tell you of a third thing not to disclose or discuss, don’t tell anyone you are a debt adviser.  If you are one and disclose it, the response you will usually receive is, “do I need to talk to you”.  And that my friend, is the end of a quiet pint and reading the paper.

As a debt adviser, or should I say senior debt adviser, that sounds much better, I get asked a lot, who should I go to for advice, advice on my debts and finances?  Where can I get help with my debts?

There are many companies out there offering advice and assistance for those in debt or financial difficulties.

A starting point for many people is to phone the bank or credit card company that has the account, explaining that they are either going to be late with a payment or just cannot pay at all.  For many bank or creditors, they may not really be able to do much of anything for you; they just want you to pay what is owed and that is that.  Some creditors may refer you to an outside agency, but it would be the same if you were to find an outside company as well.

Next there are some charities set-up that state they can help people with their debt issues and personal finances.  I can only share my experiences with what some of these charities can offer.  Some may have qualified personnel who are experienced and trained in not only what options are available to someone in debt, but also what the ramifications are of each of these options and how they would relate to that person’s unique situation, however this is not what I have found.  I would place these in the minority, and not the majority of these services.

It is not just enough knowing the options a person may have with their debts, but those options may need to be tailored for that person’s situation as there can be different aspects for everyone, and there can also be negative aspects of an option to be explained and/or avoided.

Something interesting and factual, as in it happened quite a few times, was a few different charities phoning me asking me for advice for their client.  There are two things wrong with this scene, one is the charity may not have all the needed information for me to properly “help” them with this, as they are not trained in knowing what to ask, and secondly, why would the person who is seeking the advice not just contact me directly?  Granted they may not know how to contact me, but the charity could simply say here is Jon’s number, he is a professional debt adviser and financial counselor, ring him.

So lastly that brings us to the debt advice organizations and debt management firms that are out there assisting people with debt issues on a daily basis.  Many of these companies have qualified people to help you in finding a solution for your debt or financial problem.  And all should be licensed by the OFT/Office of Fair Trading, which has put into place guidelines for all debt companies to abide by.

But the best advice I can really give anyone seeking debt advice, is to find someone you feel comfortable with.  A person or firm that not only listens to you, but also gives you impartial advice, not pushing you towards one programme or service.  They listen to your situation and what you want to accomplish, and then advise you on what all the options are, and why those options will or will not work for you, and what the hazards may be for you, based on your circumstances, if you were to chose a particular option.

I would say when you find this person or company, this is who you want to work with for your debt advice and what services they have to offer.

Jon Emge is Senior Debt Advisor and Financial Counsellor and has been working in the personal finance industry since 1987, and has been advising people of debt solutions and providing bankruptcy advice in the UK as well as ROI, America and worldwide, since 1996.

Don’t Get Into Hot Water With Your Energy Bills

Our debt advisers here at Debt Advice Group get a really good feel for what’s going on in the debt world, simply because of the number of people in personal debt that they see each week, but even they were surprised by the findings of a Facebook poll by our sister company Moneyextra, which posed a few debt questions on the topic of energy and mortgage purchase.

Over 7,500 people took part in the poll and a staggering quarter of those surveyed said that they pay their gas, electricity or mortgage on a credit card, at least sometimes (12%) and in 13% of cases pretty much all the time.

The reason for the raised eyebrows is that this is a really dangerous thing to do, in financial terms.  For a start, it implies that a person might be struggling to make the required payment in the first place, as the interest that would accrue on a ‘purchase’ of any of these items would significantly add to the cost to the purchaser.  If they can pay the amount off when it comes to paying their monthly credit card bill, fair enough, but many people just can’t and are using the card as a last resort to keep the gas pumping through to the oven and the lights on in the house.

The snowballing effect of leaving such debts on a credit card account is probably something that many of those needing debt advice recognise as an all too familiar scenario.  Before you know it, it’s not just this month’s mortgage or this quarter’s energy bill that you’ve not been able to pay off the credit card, but the following payment too, and then the next and the next.  The debt grows like Topsy and sooner or later you will meet or exceed your limit.  What happens then?  There’s every likelihood that your credit limit might be reduced or your credit stopped altogether, if you then can’t make the card payments, and the whole situation has just turned around and bitten you again.

The important thing that many people with personal debt problems and in need of debt counselling tend to ignore is the issue of interest rate.  When you are in debt, our debt advisers know full well that desperation leads you to cover up that little bit about the rate of interest that’s tucked on the bottom of your credit card bill.  It almost seems irrelevant sometimes, as it’s often Hobson’s choice and your only means of paying what you owe.  Unfortunately, many people feeling like this end up with enormous debt issues and have to get debt management plans or IVAs in place in order to get them out of the hole that paying for energy or mortgage on a credit card has caused.

14% of the people who took part in the poll said that they are in arrears with their water, gas and electricity bills.  This should also set alarm bells ringing, as the Utilities have a lot of power when it comes to getting their money out of you – after all, they control your access to heat and energy and can really force you to make that a priority payment, even if other people are ahead of them in your debt queue.

So how do you tackle that debt queue?  You can’t go on borrowing from Peter to pay Paul, so you need to find some fairness in to the equation and pay each creditor what you can afford to pay, according to what you owe.  This is where our debt advisers come in.  They can help you make draw up such a debt management plan or, if you qualify for an IVA, negotiate completely with the people in your queue on your behalf, taking away all the attempts at queue jumping, hollering louder than the next creditor and stalking you at the metaphorical ‘bus stop’.  They can stop your creditors calling you at times when you don’t have the energy and at times when you do.  They can fuel you with more power to negotiate and put you back in the driving seat again, in control of your finances and not running on empty.  That’s what debt advice; debt counselling and debt solutions provision is all about.

Rising fuel costs are the reason given by 25% of people when it comes to naming the cause of their debt.  If you are one of them, don’t shy away from sorting the situation out.  24% of people are shopping around for cheaper energy, but you may have already done that and found that the saving is a drop in the ocean.  It’s easy not to think about heating and energy in summer, but don’t make the mistake of leaving it too late to sort out your finances before the winter comes.  Scottish Power’s gas tariff hike isn’t waiting for winter – going up 19% as from August 1 – and electricity is going up by 10% on the same day.  This is just one example, so ask yourself if you can really afford that extra 19% or 10% and where it’s going to come from, if your card is already maxed out.

Debt does drain your energy, but don’t let it completely destroy your life.  Help is on tap from an expert team of debt advisers at Debt Advice Group, so plug into it, let them analyse your current situation and get things sorted out, before you are in too much hot water to save your financial situation and possessions.

Please feel free to get in touch for advice on general debt issues such as bailiffs and we’ll provide the necessary information.

Debt Consolidation: Pros and Cons

Debt Consolidation: Pros and Cons

Are you considering consolidating all your loans? For sure, you are intending to do so to effectively overcome your debt problems soon. However, as we all know, such loan products are not only full of advantages. There are also disadvantages that come with those. In the case of debt consolidation loans, you may be surprised at how there are more possible disadvantages than advantages.

In the end, your decision whether to apply for and obtain debt consolidation loans or not would depend on how you could possibly gain from getting one. The cons could surely be outweighed by the pros. You would need to fully reassess your personal and financial condition to properly evaluate debt consolidation loans and determine if it would be best if you get one.

The pros

First, debt consolidation loans could help you significantly lower the amount you need to shoulder paying off your monthly dues for loans. This could be because high interest rates of your original loans could be replaced by a single but lower interest payment required. The term of the loan could be longer, which logically makes lower interest charges possible. Thus, such products are ideal if your main goal is to reduce loan payments you are required to make every month.

How about the convenience of combining all of your existing debts into a single loan? That is facilitated by a debt consolidation loan. Such products are usually huge enough so you could repay all your current loans. In exchange, you would make a new significant debt that has consolidated all other debts. That means you would only have to deal with only one creditor, which would make paying off debt less confusing and convenient on your part.

You may say goodbye to all your other creditors that have been pestering and harassing you. On top of that, you may take a bargaining power to waive annual fees, lower service charges, or get much lower interest rates. You could further make more convenient and advantageous provisions and terms for your new loan.
The cons

First, debt consolidation loans are mostly secured loans. The interest rates could be much lower but that could be in exchange for longer terms. Such loans may take up to 20 years or longer to mature. Monthly payments required could truly be more attractive but if you could compute the overall costs of such loans, you may end up paying more. And because you have put a property as collateral, you are not exempted from the possibility or risk of losing it if you would default on the loan.

Most loan providers that offer and provide debt consolidation loans also impose financial penalties if you would attempt to alter terms of the contract in the future. Those are called early exit fees. Your current loans may also impose such charges, which may make it less practical to opt for debt consolidation. Applying for and getting approval for debt consolidation loans could also get more difficult and there are many disreputable lenders out there that may take advantage of you.

Selecting the Right Debt Settlement Attorney for Debt Settlement

Selecting the Right Debt Settlement Attorney for Debt Settlement

Are you tired of weekly collection calls, little sleep, and a spiraling debt burden that is pushing you further and further behind your ideal life? With the current economy, today is a perfect time to present your creditors with a debt settlement offer. Let go of some unnecessary stress. A debt settlement attorney is specially trained to help you navigate the legal system and settle your unsecured debt for less.

What Is Unsecured Debt?

First off, what kind of debt qualifies for assistance? An unsecured debt is simply a financial obligation where the lender does not hold any collateral. Most credit card debt, department store debt, personal loans, and medical bills are unsecured and can be settled for less than you owe.

Examples of bills that are NOT eligible are mortgages, car loans, student loans, alimony, and tax debt. You may have other options for renegotiating these obligations, but they will not be part of your unsecured debt settlement.

Creditors make their money off interest payments and fees, so as long as you are able to make minimum payments, they will not be interested in settling. When you slip to 90 days or more past due and the risk of bankruptcy increases, most creditors will finally consider a debt settlement agreement.

The Next Steps of Debt Settlement

If you meet these guidelines and qualify for financial relief, your debt settlement attorney will work with you to prepare the best course of action for your situation. Typically, the initial plan involves contacting each creditor and negotiating reduced interest rates, debt forgiveness, or other payment plans. The goal is to eliminate fees, reduce your payment burden by up to 60%, and give you some room to afford regular payments. Your debt settlement attorney will take care of all communications with creditors and collection agencies, help you correct errors on your credit report, and give you the tools to get your credit history back on track. Keep in mind that settling unsecured debt will impact your credit history, but it is often a better route than giving up and declaring bankruptcy.

When you are beyond the help of credit counseling, debt settlement is an excellent solution. The small amount you will pay in attorney fees is well worth chopping your unsecured debt in half and getting your finances back on track. Contact your debt settlement attorney and discuss your options for financial freedom.

About the Author: The author of this article has good experience in the finance field, specializes in the process of settling debts and he has written several articles on Debt Negotiation Attorney for those people who would need financial assistance and debt settlement services.

3 Tips For Making Your Debt Reduction Plan Work In 2011

One of the most popular New Year’s resolutions is to set a goal for getting out of debt. Sadly, it’s also one of the hardest to achieve. Not because it takes any special training or techniques. But because it usually takes a person many years to get deep into debt – and it will take a lot of time to get out, too.

But there are some very simply ways to improve your chances of making it work in 2011. Most importantly, if you come up with an actual plan to make your resolution come true, you’ll be way ahead of most people. You won’t get out of debt just by hoping it will happen. Or just by working a little harder at it.

If you follow these 3 tips, you’ll be much more likely to be able to cross “getting out of debt” off your wish list for 2011:

1) Attack smallest debt first, so you “see” results.

There’s nothing less motivating than having a goal and not seeing any progress. That’s why it is so important to work on paying off your smallest debt first. Commonly known as the “debt snowball” method the idea is to pay off your smallest
debt first, then when that is paid off take the money you were using for that debt and add it to the next biggest debt. And your payoff will start to grow much like a snowball or bottom of a snowman. The motivation from paying off the first debt should keep you going, even when New Year’s Day is long gone and your resolution long forgotten.

2) Write down a series of goals you can actually reach.

If you’re struggling with money it’s easy to think “I don’t need to write down my goals, I know money is tight and my credit card bills are a constant reminder.” But that’s the negative way to look at it. The positive way is to write down your goals and put them in a place you can see on a regular basis. And when you reach a goal – no matter how small – cross it off so you can feel yourself being successful. So that’s why it is critical to break down your goal into small steps (such as making each of your monthly payments, or paying down your debts in $500 or $1,000 increments, anything that is meaningful to you). And make sure you write down each and every step. The more goals you cross off the list, the more likely you will be to reach the big one at the end!

3) You MUST find ways to spend less & earn more.

Take out your bank or credit card statements and look for as many expenses as you can to eliminate – eating out, buying stuff you don’t really need, buying stuff you really can’t afford, monthly subscriptions you can live without, lesser cell phone or cable TV plans – you get the idea. And look for ways to make extra money too – get a part-time job, sell stuff you don’t use, have a tag sale, start a simple home business like lawn cutting or house sitting or pet walking. Be creative!

If you follow these steps, your chances of making your debt reduction plan work are much better. But make sure to give yourself a “pep talk” every once in a while to keep yourself focused. Share your goal with a friend or family member who will support you during your tough times. An remember to reward yourself once in a while – not with a large screen TV or cruise – but maybe lunch out with a friend you don’t see that often, or an inexpensive piece of clothing to make yourself feel better.

So don’t forget to have some fun while you are working on your serious goals!

If you need more help with your credit card debt, check out You’ll find lots of strategies for getting out of debt and tips on various debt relief programs that can help you fix your financial problems.

%d bloggers like this: