If you are finding it impossible to manage your finances or have borrowed more than you can afford to pay back, then you may need a debt management plan.
In an ideal world you would want to repay all the money you have borrowed, but it may be that through circumstances beyond your control, you are not able to meet all your credit commitments.
Should you find yourself in that position, it is important to seek help with debt at the earliest possible opportunity.
An advisor will be able to help you assess the full extent of your debt problems and recommend a number of solutions.
One of these may be a debt management plan – an informal agreement with your creditors that will commit you to repaying a proportion of the money you owe over a set period, using a fixed monthly payment.
This type of agreement can be particularly helpful if you have unsecured loans you are struggling to repay, have large debts but only to one or two creditors, or even if you just find it difficult to stretch your income to cover both living expenses and credit payments.
They are also one of the most straightforward forms of debt help, as you will only need to make one payment per month and the application process is simple.
It begins with an advisor carrying out a thorough examination of your financial position, in order to establish the full amount you owe, how much disposable income you have after essential living costs and the sum you can afford to put towards debt repayments.
If the results of this analysis suggest a debt management plan is the right course of action, your advisor will help you draft the terms of the plan. This is then used as a basis to approach your creditors and ask them to agree to reduced repayments.
Creditors do not have to accept the terms of the plan, but if they do, you will then be able to make one affordable monthly payment to your debt management plan provider and they will distribute it to the companies you owe money to.
A debt management plan is likely to have a negative impact on your credit rating and you will have to pay a fee to arrange it, but it is likely to be less difficult to cope with than the effects of an individual voluntary arrangement or bankruptcy.
Businesses that are in difficult financial situations may find it beneficial to consider a company voluntary arrangement (CVA), as this can help bring them back into the black.
Are you in need of business rescue? If you are it can be difficult to know where to turn for help – but there are organisations that can provide advice and support.
If debt problems have prompted you to consider individual voluntary arrangements (IVAs) recently, before you do anything else you should take some time to undo a few of the myths surrounding these schemes.
A voluntary liquidation is a process that takes place when a company decides to wind up its affairs, before its assets, property and other reserves are redistributed.
Having to apply for sole trader insolvency can be a distressing step but individuals will find themselves better equipped to deal with the situation if they understand the main differences between being declared insolvent as a sole trader and a business going into liquidation.
The government is cutting expert debt advisers at a time when demand for their services is increasing, fuelling concerns that disreputable debt management firms will fill the gap.
In its annual worries survey, the Samaritans has reported a slight fall in the number of calls emanating from concerns about money but financial concerns still top the list of reasons.
The Archbishop of Canterbury has revealed that the Church of England is planning to force online lender Wonga out of business by competing against it.
A new survey by uSwitch has found that 51 per cent of payday loan borrowers found the experience to be a positive one and that many believe they provide a service unavailable from most banks.
The Church of England has faced an embarrassing blow after it emerged that it may have indirectly invested in online lender Wonga.
Citizens Advice has called for stricter rules for payday loan firms, particularly regarding advertising their products.
The Office for Fair Trading has referred payday lenders to the Competition Commission after giving lenders the opportunity to curb some of the worst practices.
The government is providing £35m of backing for credit unions to join together and attract new members as an alternative to using payday loan companies.
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