The Debt Advice Online Blog

Do you have to make installment payments which you can no longer afford? Are you tired of the ever increasing balance on your debts? Are you worried that your debts will never get paid off?

Well there are ways by which you could manage to pay off your debts. Unsecured loans are dished out at a very high interest, since they do not require you to put any collateral against the borrowings. The installments are high, and if you default in paying, there are penalty interests put on to the outstanding balance, and late fees added. The outstanding of your debts bloats up and up, till it becomes hopeless. Unsecured debts, especially credit card unpaid balances, attract high APRs, and it is said that credit card APRs are one of the highest in the UK, if not the highest one.

People legitimately run into financial problems, and the effect comes directly on to the monthly installments for their debts. Illness in the family is one where you would incur expenses. If you are in the UK, you are somewhat lucky. There could be many instances where you would need money to be spent immediately, and you default on your debt payments. The result is that, you land up in a financial crisis, and your debt has grown by that time, becoming totally unmanageable. You are bewildered as to how you should handle your debts, and you become overwhelmingly stressed. You need a way out.

If you are cast strapped, you might go and consult a credit counsellor. You need to have an open discussion with him, letting him know your actual financial situation. The counsellor may advice you to go for debt consolidation, and sign for a debt management plan. He can also advice you to go in for IVA, which is the short form of Individual Voluntary Arrangement. Credit card dues could be written off, though not entirely, in certain circumstances. But this involves checking on the legal aspect of the dues that you have. So, armed with so many choices, you just might manage your growing debts.

Let me explain more what I have said above.

If you are considering debt consolidation, you ought to seek advice from a credit counsellor. The counsellor’s job is to look at your financial position, take an account of your outgoings from what-ever you earn, take into consideration of other financial factors, and advise you how to go about managing your debts. If found suitable, you may be advised to visit a credit agency who deals with debt management plan (DMP). Here again you need to open your cards and have exhaustive discussions regarding your financial matters. If your case is found suitable you shall be given an option of debt consolidation.

Under DMP, your matters regarding your creditors are taken up by the credit agency. They discuss matters with your creditors and try and reduce your debts by waiving off fees, such as the late fees charged on outstanding balance, bring down the interest rate, and also try and waive off some part of the debt balance. After having done all that, they let you know, and it is wise for you to check with your creditors the facts. The agency now goes for consolidation of your debts, and you sign on a DMP with the main understanding that you shall be paying one amount per month to the agency, who would distribute that money to your debtors.

The debt against your UK credit cards could be written off. Balances of Credit cards bills, where the credit cards have been issued before April, 2007, under some legal circumstances, could actually be written off. Legally speaking, the credit card company has to have the original papers of contract when claiming dues. If the credit card company does not have the original document, the claim is not valid. It is a six year rule. If the company does not claim within this period, the so called claim becomes non-existent. The thing that you should not misunderstand is the fact that, the debt that you have does not get wiped off. It simply means that your debt remains, only it becomes un-enforceable. This ACT came under force as from 1980, when this six year rule was introduced.
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