Money Problems Solutions

Money problems are on the increase in the UK

Money Advice Direct is an established debt advice service for confidential and no obligation advice on debt and money problem solutions. To contact the service please call 0800 074 6918 or apply online.

The advice team at Money Advice Direct has noted a 200% increase in the number of people seeking money problem solutions in UK has doubled up over the last decade. Who is to blame? What can first the lender or the spender? Last year the nation's total amount of outstanding personal debt rose above £1 trillion, with most of the cash borrowed on mortgages and Credit cards.

That extra debt is taking its toll and the number of people being declared bankrupt in England and Wales rose by almost 37% during the second quarter of this year.

Money Problem Solutions

There are various methods available in the UK to solve money problems. Some are government led and some are run and operated by the advice sector. If you have money problems it is important to get best advice and enter into a money problem solution that will solve the problem and not make the problem worse.

Money Problem solutions from Money Advice Direct

By choosing the correct money problem solution, you can expect to be debt-free within a maximum of 5 years. Using a debt management programme to reduce debts is very effective but you must understand this method is not legally binding. For this reason many clients with debts over £20,000 consider an IVA.

IVA – Individual Voluntary Arrangement

The IVA was introduced by the UK government in 1986 and is widely recognized as one if the best money problem solutions for debts over £20,000. The guidelines for an IVA are:-

• The client must be struggling to pay his/her debts as and when they fall due or the value of their debts exceeds the value of their assets. This is a statutory test that must be met under insolvency law in order to qualify for an IVA.
• The client must be resident in England, Wales or Northern Ireland or if living elsewhere must be able to provide an English, Welsh or NI address for the purposes of his/her IVA application.
• An IVA is one of the money problem solutions introduced by the UK Government.
• There should be a minimum of 3 (separate) creditors.
• The client (ideally) should be aged between 21 - 65 years although we will consider and do our very best to help anyone outside this age group.
• The client's offer of payment should not be less than £200 per month and their total contributions should be at least 40% of their debt.
• The client must have a reliable (or as reliable as possible in today's current economic client) income stream. Ideally this should be in the form of a salary as some creditors do have issues with pension based incomes (client's age) and benefit based incomes (in case benefits are stopped). However so long as there is some form of income stream we will always do our very best to negotiate with creditors.
• Property and equity values etc. aren't really relevant in terms of criteria other than that if there is a significant amount of equity creditors may request some form of equity release either as part of or instead of an IVA.
• Money Advice Direct will always review each case on its own individual merits and if we accept a case then we will always give 100% in our efforts to turn it into a formal IVA. With this in mind if you believe any client regardless of the information above would benefit from an IVA please do always contact us and we will always do our very best to help you.

DMP – Debt Management Plan

For individuals in a considerate amount of debt who do not qualify for an IVA, or do not want to consider bankruptcy should consider a Debt Management Plan (DMP). A DMP is one of the most popular money problem solutions because you to make reduced repayments to your lenders (creditors) over a number of years. Payments are made until the debt is cleared in full or until you are able to make the full repayments again. The repayments are based on what you can afford after an affordable budget has been drawn up.

A debt management plan one of the most popular money problem solutions :-

• Your payments are all made via the debt management team so you no longer have to contact your creditors.
• Your payments are affordable because your disposable income is carefully worked out.
• Your payments are flexible so if your circumstances change then you can lower or higher your monthly payments.
• You stop making multiple payments and instead just pay one affordable amount.
• Debt management is a very common money problem solutions because there is less paperwork compared with an IVA or Bankruptcy to start the process.
• Please note that for consumers considering a Debt Management Plan (DMP), although the consumer may become debt free 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.
• Please note that for consumers considering a Debt Management Plan (DMP), if interest and charges continue to apply then there will be an increase in the total amount of debt to be repaid and that due to lower monthly payments it is very likely that the debt will have to be repaid over a longer period of time.
• Please note that for consumers considering an Individual Voluntary Arrangement (IVA) or Protected Trust Deed (PTD, do be misled by claims that imply that an IVA or PTD is the only realistic option available to debtors. Please consider all other debt options available via the private, public or third sector.
• Please note that for consumers considering a Debt Management Plan (DMP), although a debt management plan may be able to negotiate a lower monthly payment, this will usually lead to an increase in the size of the sum to be repaid and that a consumer's credit rating may be impaired.
• Please note that for consumers considering a Debt Management Plan (DMP), although debt management plan providers may be able to negotiate a lower monthly payment this will usually lead to an increase in the size of the sum to be repaid and that a consumer's credit rating will be impaired.
• Please note that for consumers considering a Debt Management Plan (DMP), because a DMP is not legally binding the creditors are not obliged to freeze interest and/or charges.
  

Bankruptcy

If you have looked into all the money problem solutions available and find that you have no disposable income then bankruptcy should be considered to deal with the money problem. For the person involved, bankruptcy provides relative peace of mind and possible automatic discharge after one year (or less in some cases). For the creditors, bankruptcy allows a full investigation of the debtor's money problems to be carried out.

Bankruptcy is one of the money problem solutions that will mean a fresh beginning. Despite the implications of bankruptcy (listed below), a considerable amount of people in the UK decide to go bankrupt in the UK each year.

The implications of bankruptcy?

• You lose control of your assets.
• You cannot obtain credit for over £500 without the permission from the lender.
• You cannot act as a company director.
• You cannot take any part in the promotion, formation or management of a limited company (LTD) without the permission of the court.
• You cannot trade in any business under any other name unless you inform all persons concerned of the bankruptcy.
• You may not practice as a Charted Accountant / Lawyer.
• You may not act as a Justice of the peace (JP).
• You may not become an member of parliament.
• You may not become a member of the local authority.
• Your credit is affected for many years after the annulment.
• You may be publicly examined in court.

To discuss all the available money problem solutions please call 0800 074 6918 or apply online. Money Advice Direct money problem advisers offer individual, confidential advice for developing budgets, managing money, using credit wisely and building a savings plan.

Each money problem adviser will review a person's financial situation and help determine the best possible financial strategies. The adviser will offer solutions to a person's current financial problems, as well as personalized plans for preventing financial pitfalls in the years to come.

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