Debt Help Options

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Date: Tue, 15 Dec 2009 Time: 12:49 AM
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Are you struggling to make the minimum payment on your debts? Or even if you are only making the minimum monthly payments, are you wondering if you will ever get your debt paid off? If you find yourself in these situations it would be prudent to seek some professional assistance and guidance in finding a suitable remedy. There are four common options available to you today. These options would include consolidation loans, debt management plans, individual voluntary arrangements (IVAs), and bankruptcy. The severity of your situation combined with your financial snapshot will help determine which option would be best for you.

Consolidation loans would involve the consumer taking out one loan that is in the amount of all debts held. This consolidation loan would be for a lower interest rate than the rate associated with current debt. This will make the repayment time quicker as less interest is charged. If your credit score is not great, it may be difficult to option a consolidation loan with a low enough interest to make this a viable option for you.

A second option is a debt management plan. With the assistance of a credit counsellor, the consumer's bills are examined. Most credit counsellors can negotiate with creditors for lower interest rates and waived fees. A monthly payment amount would be determined by the counsellors. This amount is paid monthly to the credit counsellor who pays the accounts for the consumer.

An individual voluntary arrangement (IVA) is another option out there for consumers in need of debt relief. This is a formal agreement drawn up by a professional known as an insolvency practitioner. This agreement provides a repayment plan that will work for the consumer. The IVA must be also approved by a designated portion of the consumer's creditors.

Bankruptcy is of course an option that may be considered for relief from debt problems. Since this is the more intrusive option of the four described in the article, it should only be used in the direst of circumstances. After all, the effects of bankruptcy are far reaching and permeate every facet of your life.

About the Author

Emma Davies writes for debt-free.org.uk and takes great pride in helping people to be debt free