In the current economic climate, the need for debt management services has never been more apparent. More people than ever are finding it difficult to keep on top of their finances following the global recession, credit crunch and rising unemployment levels – but what are the options available to someone having financial difficulty?
Traditional debt management services
Traditionally, debt consolidation loans were the way that most people re-scheduled their repayments, to make them more affordable – by taking out a loan that covered all of their unsecured balances that was repaid over a longer period of time. More recently, people have started using secured loans, as they were often more likely to have the loan accepted if it was secured against some property (usually the home or other assets of notable worth).
Whilst these solutions may make monthly payments more manageable, they also increase the total amount to be repaid, as interest is charged over the extra time.
Also, debt consolidation loans are not as widely available now, because lenders have tightened their criteria for borrowers, so increasing numbers of people are having to search for other options.
Securing loans against your property has also been heavily warned against – as these type of agreements can carry risks. You could end up losing your home, or other property, if you can’t keep up with repayments.
Other debt management services
There are many alternatives to consolidation loans which can be used to help regain control of finances, but without the risk of losing property.
These include Debt Management Plans (DMP), Individual Voluntary Arrangements (IVA) and Trust Deeds.
Solutions like these work by enabling balances to be repaid at more affordable levels and can be useful ways of avoiding further legal action, bankruptcy and repossession, but without the need to borrow more money.
DMPs, IVAs and other programmes are usually offered by professional, specialist organisations, who will normally offer free advice and guidance before deciding what action is required. They will normally go through a range of ways to help your financial situation, including traditional options and some that you may not be as familiar with.
Reputable organisations include The Debt People, Chiltern and Hamilton Locke – their debt advice is free.
For further information on the most popular debt management services, please click on the relevant link: IVA, DMP, Trust Deed, Bankruptcy and Debt Consolidation loans.
Alternatively, for immediate advice and assistance, call the number at the top of this page and speak to one of our friendly and helpful team now.