Which Way to Turn?
Struggling to find the right solution for your debts?
We?ve simplified the options by listing the advantages and disadvantages of each debt solution, to help you make the right decision.
Advantages of Consolidation
- All debts will be paid off
- Low interest rates if the consolidation loan is run alongside your mortgage
- You can get a fixed rate for the term of the loan
- You only have one affordable monthly payment
- Creditors stop chasing you for payment
Disadvantages of Consolidation
- Over the repayment term, interest costs can be costly
- You can be declined the loan if you do not meet the criteria
Advantages of Debt Management
- You no longer have to deal with creditors
- You only have one single affordable monthly payment
- Your financial situation is reviewed regularly to account for any changes to your situation
Disadvantages of Debt Management
- You are not legally bound into the arrangement, so creditors do not have to agree to the arrangement
- The duration of the debt management plan can be indefinitely
Advantages of IVA?s
- You only have one affordable monthly payment
- Your debts can be cleared in five years
- You keep your house and your car
- You avoid Bankruptcy
- You no longer have to deal with creditors
Disadvantages of IVA?s
- You can not borrow any money during the period of the IVA
Advantages of Bankruptcy
- You have affordable monthly payments
- Your debts are cleared in a maximum of three years
Disadvantages of Bankruptcy
Creditor
Someone you owe money to.
Unsecured lending
Total loan & credit card debts excluding your mortgage and any hire purchase.
Country
The country you currently live in.
Insolvency Practitioners
Also known as an IP, a person who specialises in formal insolvency cases.
Valuations
The process of determing the current value of an asset.
Equity
The difference between the market value of a property and the claims held against it.
Lender
Someone you owe money to.
Eviction Order
A court order by which a person may be evicted.
Arrears
An unpaid and overdue debt.
Disposable Income
The amount of income left to an individual after taxes have been paid, available for spending and saving.
Statement of Affairs
A financial report showing assets and liabilities at expected liquidation values and shareholders' equity.
Insolvent
Unable to meet debt obligations.
Secured Loan
Money borrowed using goods or property as a guarantee.