De Justica Colaborativa
When many people realise they have a debt problem they will have spent months or even years panicking, using credit to pay other credit, ignoring telephone calls and not opening their mail. This is not a sustainable way to live their life so eventually they decide they've had enough then one should be done.
When the decision is come to resolve a debt problem there are a number of individuals you might use, however most are too embarrassed to tell friends and family about their debt problem. Instead they might opt to tell another company concerning the problems they're facing.
Telling the best company in regards to a debt problem
There are thousands of companies offering debt advice and support however many inside the for profit industry are only interested in the net income they are able to make. Similarly there are to make money company that do worry about assisting you too.
The safest option when you realise you've got a debt issue is to speak with a nonprofit debt advice charity. Owners of charities aren't able to take an income or make anything taken care of the charity is ran, meaning the decision makers are making decisions according to what is best for the client, not their own pocket.
What solutions can be found when confronted with a debt problem?
There are a number of solutions available along with a debt advice charity will look to make sure you are offered all available debt solutions so that you can make an educated decision. The solutions available for individuals debt include;
A debt management plan is definitely an informal agreement you are making together with your creditors. You agree to repay all the money you borrowed by over a longer time than originally agreed. The debt management plan have a negative effect on your credit history since you aren't keeping up with your contractual arrangements. However, because you are agreeing to repay your debt inside a scheduled way creditors might wish to freeze interest and charges to help you do this quicker.
A debt management plan with a for profit company will have charges and costs that you simply be forced to pay. A charity debt plan will not ask you for directly. The quality of service with a for profit debt management plan or having a charity is unknown however it continues to be suggested that because you are spending money on something with a to make money company that the services are better. It has not proven and also the decision is yours. You'll be debt free quicker with a charity than a for profit company because there are no direct fees.
Trust Deed (Scotland only)
In Scotland you can enter a Protected Trust Deed for those who have a minimum of 10,000 of personal debt, at least 2 different creditors and can repay at least 10% of the money you borrowed on the 3 year period. The trust deed is a form of insolvency where you can no more afford to meet your contractual payments every month.
The Trust Deed enables you to place a proposal for your creditors, which if accepted, will allow you to pay you monthly disposable income into one company (the insolvency practitioner) who will distribute the cash to your creditors on a pro rata basis. Should you complete the trust deed satisfactorily you will then be free of debt at the end of the solution with interest and charges being frozen and then any remaining debt following the term of the Trust Deed being wiped off. In a Trust Deed any equity inside your assets is going to be considered and could be included.
IVA (England, Wales and Northern Ireland only)
For those who have a serious debt problem and are not able to meet your contractual obligations every month then an IVA may be suitable. The person Voluntary Arrangement (IVA) is really a well used debt solution in England, Wales and Northern Ireland (c. 40,000 + people enter an IVA every year) and may enable individuals to repay the things they are able to afford on the 5 year period.
The factors to go in an IVA would be to have at least 15,000 of unsecured debt owed to a minimum of 3 different companies and then repay a minimum of 25% of the money borrowed on the 5 year period. After your debt solution any interest and expenses will be cleared and also the remaining bad debts will be wiped off. The IVA has a negative effect on your credit history since you aren't repaying all the money you borrowed. A default will be placed on your file which will remain there for 6 years.
Another debt option would be the Bankruptcy. This debt option would be for those who have the most severe debt problems where no other solution will realistically resolve the debt problem. Bankruptcy can impact an individuals ability to continue within their employment - accountants along with other professionals are not able to be produced bankrupt. Also, if you are a director of the limited company then you must relinquish it when being made bankrupt. The insolvency practitioner is a bankruptcy will appear to gain just as much money for that creditors as is possible which may mean selling any property, cars, shares or other assets.
Your financial troubles situation might not be severe enough to warrant the solutions above and for that reason general money advice could be enough.