The advantages and disadvantages of IVA

When it comes to getting out of large debts there is no better solution than the individual voluntary arrangement. The individual voluntary arrangement, IVA, is a debt management program that is formed and backed by the UK government. The program is limited only to citizens of Wales, North Ireland and England. Aside that anyone that wants to take advantage of it needs to have an income of some kind and debt which is more than £12.000. 

One of the easiest ways to learn more about this program is through online IVA Calculator. They can provide basic information such as whether you qualify or not, what to expect from the program and what to do first. Regardless if you use IVA Debt Calculator or some other way to inform yourself about IVA here are the main advantages along with the main disadvantages of this program.

Advantages

Good chunk of the debt can be written off as unpayable

The rates will be designed to match your income

There is no danger of lawsuit from your creditors

Your creditors won’t be allowed to contact you anymore.

You get to be debt free in pre-determined period which can’t be more than five years.

Disadvantages 

You can’t take a new loan during the period you participate in IVA

Your credit score will be pretty much in ruins, or at least in the following several years after you exit the IVA.

In your public record will be written that you have used IVA

In case you fail to meet your obligations with IVA you can consider yourself bankrupt.

The main point is that the program can be beneficiary for some cases while for some not so much. Anyone interested in this program needs first to talk to IP before making a decision.

Help me with my debt- A guide to becoming debt free

Help me with my debt- A guide to becoming debt free

For a lot of people, living a life that is free of debt is virtually a dream. Is it even possible to live a life in which we do not have to pay debt, they ask? Well, as a matter of fact, it is quite easy to live a life without having to pay large amounts of debt. In the following few paragraphs, you will get complete information that will help you in living a debt free life within a very short amount of time.

Create a written budget

The most important thing that you need to do at the start of every month is to create a written budget. How much money are you going to spend every month? And what are you going to spend it on? By mentioning these important details, you will be able to get a clear idea of the amount of money that is available at your disposal once all of the essentials have been paid for. Now, it is important to stick to the plan.

Go for debt consolidation

This point is only valid for people who are having to pay a lot of debts every month. Often times, keeping track of all the repayments can be quite a troublesome task. That is the reason why it is much easier for you to go for debt consolidation. Debt consolidation companies will agree terms with your creditors in which you will pay one large amount of payment every month and then the debt consolidation firms will divide the money between the creditors. The process is simple, and takes away a huge amount of the burden.

Reduce your costs

A lot of people are not willing to alter their lifestyle in order to become free of debt. However, if you really want to make a dent in your outstanding dues, one of the most important things that you need to do is to make sure that you down on most of your ‘wants’, and maximize your needs. Prioritizing your payments is crucial if you want to reduce your debts quickly and efficiently, and unless you cut down your ‘wants’, this can’t be achieved.

Talk to debt advice companies

The main job of debt advice companies is to provide you with important information on making your payments. These companies can provide you with crucial tips and guidance that can go a long way in helping you out.

Debt Advice for LTD Companies

debt_collection4Before we talk about debt advice for a limited company, it is important to understand what a limited company really is. Basically, a limited company is one in which the liability of the owners is restricted to the amount of money that they have invested within the company. Basically, this means that in the case of a closure, the liability of the company will only be transferred to the owners to the extent that they have invested in the company. In such cases, the company is treated as a separate entity. Now, there are a number of different limited companies out there, mainly because of the freedom that it provides company owners. Now that you know what limited companies are, here are some tips on getting debt advice for limited companies:

Contact a professional debt management company

Most of the time, the reason why debts tend to go out of control in limited companies is because they are unable to get proper advice on when to take more debt. Failure to agree to the right interest rates, the proper management and understanding can all prove to be major factors in a poorly managed debt, which often becomes too big for the company to pay back. The job of debt management companies is to provide you with proper information regarding when you should be taking a debt, as well as the amount of money that you should be borrowing. As the owner of a limited company, this makes it much easier for you to analyze the impact that the debt might have on your future business dealings. These debt management companies charge a nominal fee for their services, but considering the amount of money that they will save you over the year, they are a viable investment.  More info can be found on this at debtadvisoryscotland.com

Look for other solutions

 

For a limited company, there are numerous spontaneous solutions that a company can look towards in order to generate the funds required to pay off the debt. For instance, if it is a public limited company, the company can just take the option of issuing more shares to the individuals, which would allow the company to generate a much larger amount of capital, which could, in turn be used to pay off the loans. Now, the good thing about this is that the company usually has to pay nothing out of its own pocket; all shares usually receive dividends, which are taken out from the gross profits that the company earns. Or, if it is a private limited company, one of the partners could increase his/ her capital by introducing more funds in to the company, which would ultimately drive up his/ her profit sharing ratio. The point is, this money could be used in place of more debt, which would accrue interest and would eventually increase over the passage of time.

Contact debt advice companies

If a private limited company is under a lot of debt, the best way to go would be to contact a debt advice company. Debt advice companies are designed to provide companies/ individuals as well as firms with various different kinds of solutions, depending upon the type and amount of debt that the client currently owes. These companies are also willing to talk to the creditors and create a feasible repayment policy that would benefit both parties. Obviously, these debt advice companies usually charge a bit of fees for their services, but generally prove to be a viable investment, as they would make sure that the companies receive proper advice on when it comes to borrowing money, or if there are other alternatives.

Help with debt in the UK

For Scottish residents help with debt can never be an issue since there are plenty of resources both in the digital world as well as the physical world. The challenge however is to find the right solution and then work with it to become debt free. After acquainting yourself with the basics of various debt solutions offered by the Scottish government, you may have to find an insolvency practitioner or an approved money advisor to set up the solution for you and administer it. Similar to other situations, all the websites/individuals/ and firms offering services to set up the debt solution for you are not made equal.

Playing it safe

Your effort is directed towards getting out of debt and rebuilding your financial history on completion of the debt solution. With this objective when you are seeking help with debt, no one should take you for a ride in the name of fees and other charges for setting up a debt solution for you.  The fees and service charges to be paid by you to the insolvency practitioners, the money advisor or other authorized entities is pre determined by the government. When someone is trying to add to the stipulated fee, you are better off walking away and finding a more acceptable service provider such as Trust Deed Scotland.

Plenty of legal paper work involved

Becoming debt free through the debt solutions offered by the government also involves plenty of paper work, apart from administering the solution for you over an extended period of time.  Therefore, there are fees attached to these services though most part of it will be claimed from what you pay towards your debts and only the remainder is distributed among your creditors. Once you start discussions with a money advisor, debt expert or insolvency practitioner, get them to specify their charges and understand the amount of cash you need to find outside the monthly payment determined for you.

How big is your debt?

Another important consideration ahead of seeking a debt solution is the size of your debt. If the cumulative value of all your unsecured debts is only a few thousand pounds, you may also consider speaking directly to your creditors for a substantially reduced pay off. Most creditors would not agree to such a proposal at the first instance. You may need to speak to them repeatedly and convince them that the settlement offered by you is the best they can get under the circumstances. If you succeed, you will become debt free without the overwhelming negative impact of a Scottish debt solution. Once you pay off the accumulated debts, you can rebuild your financial history without the waiting period stipulated under the debt solutions.

Information is power

Today, we are living in the information age and the digital world brings you a wide range of authentic information on different subjects. When you devote time finding these useful guides and tips, you have the ability to present yourself as an informed person. This way, you will ensure that the debt solutions that are offered to you are tuned to your personal circumstances and the service provider is not taking you for a ride.

What is a Debt Arrangement Scheme?

If you are stuck in a lot of debt and are unable to figure a way out of it, the Debt Arrangement Scheme might be a great idea for you. The Debt Arrangement Scheme is solely focused upon the residents of Scotland, so if you are living within the country, you can apply for the protection of this scheme in order to get a bit more time to clear your dues. Basically, the Debt Arrangement Scheme is a scheme that was started and run by the Scottish government, and its primary purpose is to help the debtors by providing them with more time in which to clear their payments, without having to worry about constant harassment or threats of legal action from their creditors.

Opting for the Debt Arrangement Scheme is a great option for people who are finding it more and more difficult to clear their payments on time. The day on which you file an application for the protection of the Debt Arrangement Scheme, interest, extra charges and fees that are levied on your account will be frozen on your account. Usually, these charges would have become payable once your application was approved. However, if a debtor is able to successfully complete the program and get out of their debts using the Debt Arrangement Scheme, these charges are written off on their account, essentially leaving them with no debt.

There are no costs involved for people who wish to access the Debt Arrangement Scheme. It is offered for free by numerous money advisers that operate at local authority money advice centers or units, and have been approved by the government to operate on their behalf. The Citizens Advice Scotland also offers the Debt Arrangement Scheme. All of the assets of the debtors are protected as long as they are under this scheme, including their house, as long as they are able to keep up with the mortgage payments that are levied.

The scheme aims to provide a consolidated solution for both debtors and creditors, as it allows creditors to recover more than 90% of their overall money borrowed, while debtors are also able to prevent their credit scores from taking a serious hit as a result of continuous missed payments. Therefore, the Debt Arrangement Scheme is mutually beneficial for both parties, and the uk government aims to stimulate further economic growth by approving money advisers in numerous parts of the country.