Personal Debt Consolidation

Debt consolidation solutions

The UK Insolvency Helpline assist many people each year to consolidate personal debt. Every day, people throughout the UK are falling victim to salesmen offering personal debt consolidation solutions of one kind or another. But remember - if it sounds too good to be true, it probably is. If you are unsure about what method to chose to consolidate personal debts please call 0800 074 6918 or apply online.

There are many debt consolidation companies in the UK that are staffed by aggressive salesman.  These personal debt consolidation firms aim to help you take more control of your finances with a low rate debt consolidation loan or debt management procedure.

The idea is that people with multiple debts will be offered a personal debt consolidation loan to relieve the pressures of expensive monthly and so help them get on top of their debts. Many of the sales firm’s state they have the cheapest consolidation loans in the UK which will mean you'll end up with much lower, more manageable repayments every month.

Beware of expensive debt consolidation solutions!!!

Personal debt consolidation companies promise a way you can consolidate your bills into one monthly payment without borrowing and stop credit harassment, repossessions or wipe out your debts.

Unfortunately, these offers can involve bankruptcy proceedings, but rarely say so. While bankruptcy is one way to deal with serious financial problems, it's generally considered a last resort. This is because it has a long-term negative impact on your creditworthiness. A bankruptcy stays on your credit report, and can make it harder to get credit, a job, insurance, or even a place to live. To top it off, you are likely to be responsible for legal fees for bankruptcy proceedings.

Read between the lines when looking at personal debt consolidation offers.

Before resorting to bankruptcy, talk with your creditors about arranging a modified payment plan, contact the personal debt helpline on 0800 074 6918 or apply online to help you develop a debt repayment plan, or carefully consider a second mortgage or home equity line of credit. One caution - while a home loan may allow you to consolidate your debt, it also requires your home as guarantee. If you can't make the payments, you could lose your home.

The main personal debt consolidation procedures are:

IVA
An IVA can help you become debt free (subject to terms and conditions). It is a legally binding debt solution and up to 60-70% of the debt can be written off over a 5 years period. To qualify for an IVA debts must be over £15,000 and there must be at least 3 creditors. An IVA can help you get out of serious debt and ensure you get debt free (subject to terms and conditions) over a fixed period. If you have been refused credit or loans in the UK, you can still clear debt with an IVA. An IVA is suitable for personal debt consolidation where the debts amount to £15,000 or more.

Please note that for consumers considering a Bankruptcy Order, Individual Voluntary Arrangement (IVA) or Protected Trust Deed (PTD); that although the consumer may become debt free (subject to terms and conditions) at the end of the Bankruptcy, IVA or PTD period, the effect on their credit rating is likely to remain on file for 6 years. In addition the consumers / debtors name, address and birth date will become public knowledge on the governments “Individual Insolvency Register”. The individual insolvency register (insolvency.gov.uk/eiir/) allows anyone to check, quickly and easily, if someone is bankrupt or has taken out an "individual voluntary arrangement" (IVA).

Please note that for consumers considering a Individual Voluntary Arrangement (IVA) or Protected Trust Deed (PTD); if the consumer is a property owner and there is sufficient equity in their property the supervisor of the IVA or PTD may require the debtor, to revalue their home and realise the equity to pay off some or all of the debt at some point in the procedure. Please beware of debt advice firms who not state that with an IVA and in a PTD the supervisor may require the debtor, if they are a homeowner, to revalue their home and realise the equity to pay off some or all of the debt

Please note that for consumers considering an Individual Voluntary Arrangement (IVA) or Protected Trust Deed (PTD); that only unsecured debts are to be included e.g credit cards, unsecured loans and bank overdrafts. Please note that at the end of the period those debts that are not included such as secured debts, Government fines and child support payments will remain to be outstanding.

Debt Management Plans
This is a popular debt solution that can substantially lower debt payments. If you cannot get an IVA then this debt solution may suit as there are fewer restrictions. A debt management plan can help you get out of serious debt and ensure you do not fear opening your post or answering your telephone. If you have been refused credit or loans in the UK, you can still clear debt with a debt management plan. A debt management plan is suitable for personal debt consolidation where the debts amount to £2,000 or more.

Please note that for consumers considering a Debt Management Plan (DMP), although the consumer may become debt free (subject to terms and conditions) at the end of the DMP period, if a default notice has been issued the effect is likely to remain on the consumer's credit profile for a lengthy time.

Bankruptcy
Bankruptcy is the best debt solution available if you are unemployed or do not qualify for an IVA or a debt management plan. Bankruptcy can help you get debt free but has serious implications. If you have been refused credit or loans in the UK, you can still clear debt by filing bankruptcy. An IVA is suitable for personal debt consolidation where the debts amount to £15,000 or more. Bankruptcy is suitable for personal debt consolidation where the debts amount to £750 or more.

Money Advice Direct is an established freephone provider of non-judgemental and confidential debt advice in the UK on serious debt problems. Whatever solution we recommend, honest, confidential and non-judgemental advice is available 24 hours a day, 365 days per year. If you are in debt call us without obligation today on 0800 074 6918 or apply online.

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