Debt consolidation, bankruptcy and IVA advice have become all too familiar words for many people seeking help with spiralling debt. The economic crisis and subsequent recession has seen risk adverse creditors reign in on accessible easy credit at low interest rates. Gone are the days when credit card holders could easily carry out a balance transfer on existing debts to a lender offering low or 0% interest rates of a year or even longer.
As more and more of our wages go towards ever increasing household bills like food and fuel people find they are struggling to make repayments on their debts and are turning to debt consolidation and IVA advice in order to get themselves back on a more secure financial track.
Consolidation should be considered before taking the drastic step towards bankruptcy. By consolidating all your debts with one lender and making one repayment each month you may be able to get a better handle on your income and outgoings and get your finances back on track. By consolidating your unsecured debts into one monthly repayment, often at a lower rate of interest, that you can afford, you can take some of the pressure and stress off yourself.
If you have been bombarded with payment demands from your creditors you will know only too well how stressful uncontrollable debt can be. Consolidation allows you to take control of your finances again, paying off what is affordable and continuing to meet your other monthly outgoings. Reducing multiple debts into one payment means you are less likely to miss a payment and thereby hold onto a good credit rating.
Consolidation is not the answer for everyone, it very much depends on your individual circumstances and seeking IVA advice may be a more viable option. Whatever you do, try to leave bankruptcy as your very last resort. When most people start looking into consolidation they have often left it too late and have already missed repayments which has damaged their credit rating. This will make it harder to secure a debt consolidation loan with a low interest rate.
If you have problem controlling your spending on credit, debt consolidation can be risky if you continue to spend on credit cards on top of paying off your consolidation loan. This will only exacerbate your debt problems. It is also inadvisable to take out a secured debt consolidation loan as this puts your home at risk.
If you think bankruptcy is the only option left open to you, consider taking some IVA advice first. If your debts are over 12,000 and you are in regular employment an Individual Voluntary Arrangement may suit you better.
After this period all your remaining debts are written off. An IVA is a legally binding agreement and under such an agreement your creditors can no longer hassle you. If you are thinking of pursuing IVA advice always use a reputable company, it is certainly worth looking into in order to avoid the drastic step of bankruptcy.
Learn more about debt consolidation. Stop by Alan Jeffries’s site where you can find out all about bankruptcy and how to avoid it.
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Tags: Credit Debt Consolidation, Debt Consolidation, finance