How to deal with unpayable debt 101
Even so that that the economy recovery is in progress many people find it hard to deal with old debts. Large percentage of those people is faced with debts which are higher than their current incomes. As a result they are literary pressed to the wall and tormented by their creditors who are only interested in their money. Until few years ago sequestration was the only left to do for people with big debts. However, there are few more alternatives for getting rid of debts. Those alternatives are:
Debt Arrangement Scheme
Sequestration is the last resort for anyone with big debt and insufficient income to pay debt rates.
When looking for a trust deed the first step should be finding a sequestration company. Even so that the name, Sequestration Company, applies that it is a company that deals with sequestration only, the truth is that it incorporates other debt management programs as well. Those companies are specialized in debt management and work with people in large debts. The experts that work there can recommend which program matches the specifics of your circumstances. Also, they make sure that your interested are properly represented in front of your creditors while your debt is paid off through some of the programs offered there.
Eligibility is the first thing to consider. The common thing about all programs is that you need to be resident in Scotland and to have a full time job. Sequestration is the exception to the rule that says that in order to receive Scottish insolvency help you need to be employed. You can sign for sequestration even if you are unemployed. The third criterion is how much you owe to your creditors. Each program has a different low mark. For an example, in order to qualify for the Trust Deed your debt needs to be at least £5000 while for the LILA program the low mark is £1500.
Next thing to consider is finding a nearby sequestration company. Most of them can be easily find via the internet or the yellow pages. They contain information on anything that might concern you for your debt, plus they have toll-free contact numbers, meaning that you can talk to someone that can provide you with more information. Consulting with an expert for debt management that works in some of those companies is free, at least for most of the debt management programs. For an example, insolvency practitioners, never charge for their services or for a consult. All you have to do is arrange a meeting and they will explain everything about the program and accept your case without any compensation so ever.
Even though that each programs brings something different and specific the trust deed program is the most popular debt management program. This program can help you clear of all debts in just three to five years after which period you will be free of any debt. That is only if you follow your payment plan arrangement made with this program. The great thing about this program is no matter how big your debt is it will be covered during that period of time. Plus, there is a pretty good chance that some of it, if not a big chunk of it, can be unwritten as unpayable. In addition to that your payment rates will be designed to match your income.
If you don’t qualify for some of the mentioned debt management programs you will need to file for sequestration. Sequestration means that all of your assets will be sold in order to pay part of your debt. Also, significant part of your income will be distributed to your debtors.
Full overview on IVA
What is an IVA is a pretty question that is often asked by plenty of people who have heard only a thing or two, but never the complete story. Before getting into what IVA really is it needs to be answered what IVA stands for? IVA stands for individual voluntary arrangement.
IVA’s goal is to provide assistance to people that is struggling to pay off their debts. The program is backed and regulated by the government but run by private companies. Only an authorized person called insolvency practitioner (IP) can implement the program, meaning to intermediate between the creditors and the debtors.
In order to be able to take advantage of the program one needs to
- Be resident in North Ireland, England or Wales
- Have a income (government help such as social welfare is not considered as income)
- Have a debt which is more than £12000
- To not have assets which value is greater than the value of the debt
- To be willing to participate in it
Anyone who is eligible can count on:
- To be debt free no later than 5 years after signing the IVA
- Certain percentage of the debt to be written off as unpayable
- To be safe from legal action by the creditors
- The payment rates to be adjusted to his income
The only downside to IVA is the credit rating which will be pretty much in ruins after the completion of the program. However, considering that the alternative to IVA is nothing but bankruptcy the ruined credit rating is not such a great price. Plus, the credit rating can be restored to some point several years later. All this is the best and the shortest answer to what is an IVA? If you are interceded in more detailed answer it’s for the best to call an IP and arrange a meeting.