Getting help with your debts is incredibly important and it's best if you get advice before things get too bad. There are lots of companies in the United Kingdom which can give you free debt advice and even help you with your finances, but it is important that you choose a company that is right for you - different companies offer different services to their clients.
One of the most common debt solutions in the UK at the moment are debt management plans. A debt management plan is an informal arrangement between you and your creditors, where you work out a repayment schedule from your disposable income each month. Disposable income's worked out by creating an income and expenditure report, which any debt management company should do for you before deciding on your repayment plan type. Your income and expenditure is exactly what you might expect - it is exactly what comes into the property each month, like your wages or any benefits you may be entitled to and also what you pay out for every month, like your mortgage or rental payments, utility bills and grocery bills. Once you have calculated both amounts, you then subtract the expenditure total from your income and this leaves you with your disposable income.
Another popular method of getting help with debt is called an IVA, which normally lasts for around five years. An IVA is a formal agreement, introduced by an Insolvency Practitioner, or IP and set up through the County Courts. When an IVA is set up, your creditors will meet to vote on whether they want to proceed with this course of action. If seventy-five per cent or more of your creditors decide in favour of the IVA, then it will pass and the arrangement will be sanctioned. If less than seventy-five per cent of your creditors are in favour, then the IVA will fail and an alternative method of repaying your creditors should be found, like a debt management plan.
Your disposable income, or DI for short will sometimes determine what type of plan you are eligible for. For example, if you have over one hundred pounds available each month to pay your creditors, then you will qualify for a debt management plan. However, if you have over two hundred pounds a month available and owe over fifteen thousand pounds, then an IVA, or individual voluntary arrangement might be a better option and can write off all the debt you can't afford to repay. Whatever option you decide to take, it is really important that you get free debt advice before committing to anything.
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