Types of Debt

•September 17, 2008 • 1 Comment

There are all types of Debt , Wiki summs it up by saying that :

Debt is that which is owed Wikipedia definition of debt

Debt can range from personal debt through to business debt.

Common Forms of Debt

Individual Debt normally amounts from the likes of credit card bills, Council Tax and Utilities, Bank Loans.

There is a number of different solutions to debt problems; some solutions are better suited at dealing with certain situations, where as some debt solutions might be more better and moreappropriate for others. 

Debt Solutions – Exploring The Options Open

For some people, just one solution may be sufficient, but others may need to explore more than one avenue to deal with their debt problems.

What ever you decide – it is important to know your options and fully understand what you are signing up to.

Debt Help – What Help Is Out There to Help People In Debt

There numerous typs of Debt Help out there… but all of them have their pros and Cons.

 

 

What Type of Debt solutions are available to me and does it fix my needs

 Question

Debt Management

Debt Consolidation

IVA

Bankruptcy

Which debt solution can save me from re-mortgaging or selling my house?

Yes

No

No

No

Is this debt solution a confidential solution

Yes

Yes

Yes

No

Will this debt solution avoid the stigma of bankruptcy?

Yes

Yes

Yes

No

Will creditors accept less than I owe?

Yes

No

Yes

yes

Is this debt solution most likely to reduce my monthly payments?

Yes

no

no

yes

Will creditors stop adding interest to my debts?

Yes

Effectively, interest is transferred to your new secured loan or re-mortgage

If you are a home owner, effectively interest will be transferred to the re-mortgage that your creditors may demand.

yes

Is the debt solution a flexible plan that can be easily altered if my circumstances change?

Yes

No

No

No

Which debt solution enables me to change the monthly amount that I am paying?

Yes

No

No

No

Which debt solution does not have expensive fees?

Yes

No

No

Yes

Will it adversely affect my credit rating?

Will not make it any worse than it already is.

No

Yes

Yes

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Debt Management

•September 17, 2008 • Leave a Comment

Debt Management is probably the most flexible way of paying your debts and protecting yourself.

Debt Management can be a great way of getting your finances under control and also a way of reducing your debts down to an amount that you can afford each month as well as having enough money left to pay essential bills like rent, mortgage, council tax, food, utilities, travel etc.

Debt Management can also help to stop various forms of Court action whether it is a Warrant of Execution, a Liability Order, a Possession Order, an Eviction, a Disconnection Notice or, even, a Statutory Demand leading to a Bankruptcy Petition.

mortgage & rent arrears and council tax arrears can all be included in your plan to help protect you and your home.

You can’t borrow your way out of debt
More borrowing leads to more interest which leads to having to make even more repayments. Taking on more borrowing therefore is not usually the best way to get out of debt. So, for the majority of people who have debt management plans there is no additional borrowing involved.

Debt Solutions

•August 20, 2008 • 2 Comments

Debt Solutions – whats out there?

There are many different types of organisations and firms that can provide debt advice. BUT it is important to ensure that people who have debt problems receive the right type of debt advice. One place you can find a list of debt management companies is www.freeindex.com.

This site is that not only does it list the companies but also lets you read reviews on debt management companies. (click here for an example of debt management companies.)

Dont they all give you the right type of debt advice?

You would think so but I have heard some horror stories from friends of mine who have been “pursuaded” to got down the wrong debt solutions route.

Examples:

  • Over the past few years many people with debts have been persuaded by both TV/Radio advertising and by salesman to convert their debts into a loan secured on their home. (what we know as Debt Consolidation). In many instances this has been inappropriate advice and in some cases people have lost their homes as a result.
  • Equally persuasive has been the promotion of IVAs. Again, unfortunately they have proved to work in a minor number of cases.
  • Some debt managers only deal with consumer credit debt and ignore the problems of mortgage/ rent arrears, not to mention council tax and utility bills. (i’ll talk about that later)

Debt Solutions – a minefield

All these methods can be viable options for debtors but only when used in the right context. In some instances more than one method may need to be employed. It is also important to ensure that anyone giving advice or acting on behalf of a debtor does so in the best interests of the debtor. Some such organisations are effectively (shock horror) funded by debt collection agencies.

so who do you what debt solution do you trust?

obviously it is important to research debt solutions. thoroughly. Look for a firm that has a track record of fighting effectively for debtors and who take the broadest possible view of a debtor’s problems. DONT BE AFRAID TO ASK THEM (remember you are the client). look for ones who use all the alternatives available to help people with all types of debt problems.

 

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DISCLAIMER: The information provided here should only be treated as a guideline. I strongly recommend that you consult with a debt professional who is able to discuss with you fully your situation and who is able to analyse your particular circumstances.

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Debt – introduction to Debt

•August 13, 2008 • Leave a Comment

Debt… a dirty four letter word.

Debt – even the word on its own is enough to send shivers down most peoples spines. But spare a thought for the millions of people across the UK right now who are struggling with some form of debt.

The reason why people are in debt vary. No two peoples debt is the same. In the Next blog i will look as what type of Debt is outthere and solutions available.