One Advice | Bankruptcy, IVA & Debt News

If you have unsecured debts over £15,000 then you might be thinking about seeking professional IVA advice.

An IVA is a potential debt solution for those looking to avoid bankruptcy, and getting IVA advice is the one of the best ways to see if an IVA is right for you. The typical criteria of an IVA is that you need at least £15,000 of unsecured debt  (debts which are not secured against any asset, such as credit card debt or personal loans).

What is an IVA?

IVA stands for Individual Voluntary Arrangement. An IVA is a legally binding formal agreement between you and your unsecured creditors where you agree to pay a set amount over a fixed term, and the rest can be written off on successful completion of the IVA.

For the IVA to go ahead it must be approved by your creditors. For the IVA to be accepted, 75% of your creditors (in terms of debt value)  must agree to the IVA.

Typically an IVA means that you will make one affordable monthly payment over 60 months. You will be free from your unsecured debt on completion of the IVA. The exact workings of your IVA will be dependant on your personal situation which is why it is essential for you to seek IVA advice.

IVA Advantages:

An IVA offers a certain amount of debt relief whilst still allowing you to avoid the effects of bankruptcy. One of the many IVA advantages is that you make a monthly payment which is affordable to you, meaning that you should find that you can afford your secured debt repayments, such as your mortgage.

There are a number IVA advantages, and the best way that you can discover if you can be debt free in 60 months with an IVA is to get IVA advice.

IVA Disadvantages:

Although there are many advantages of an IVA, you should also be aware of any IVA disadvantages. You have to commit to making the payment for 60 months and failure to do so could result in bankruptcy.

You need to be employed as an IVA means that you commit to making set payments to your creditors and for that to happen you have to have a stable income. For further IVA advice about the criteria of an IVA, please get in touch with one of our IVA advisers. Even if an IVA is not right for you there are alternate debt solutions, such as a debt management plan.

A greater number of men could need debt advice, as women are more likely to tackle the effects of the credit crunch by cutting back on spending. According to a Legal & General poll, the ongoing recession appears to have changed our spending habits.

Of the 4,000 people asked for their Changing Face of British Homes research, 56% of women are making savings and avoiding the need for debt advice by cutting back on their weekly shopping bills, compared with less than half (41%) of men.  Another area where women are looking to cut back more than their male counterparts is on high street spending. 60% of women are looking to cut back on their spending sprees, compared with 57% of men.

Garry Skelton from the company, commented: “The current economic climate is having an effect on most of us. While Brits are shopping around and cutting back, it’s important to ensure that any compromise does not mean losing something that is valuable.”

If you have cut back on spending but still feel as though your debt repayments are a struggle, One Advice are here to help. We can offer you debt advice and try to find you a debt solution to reduce your monthly repayment of your unsecured debt. Call now for further debt advice.

The number of insolvencies issued will continue to rise unless young people are given education about how to handle their finances from an early age.

The ifs School of Finance is the only place which offers GCSE, AS and A level equivalent qualifications in personal finance. Head of public affairs at the school, Phil Hall, is urging consumers to have better knowledge over their money matters, which may stop many seeking debt advice in order to deal with unmanageable levels of debt.

Hall comments: “Levels of consumer debt have been at dizzying heights for several years, causing many to face insolvency. Once again it looks as if there will be over 100,000 insolvencies in 2008 if current trends continue. In fact, falling levels of employment together with rising mortgage, food and energy prices mean that these numbers could grow considerably in the months ahead. By equipping the public with the skills, knowledge and confidence to manage their finances effectively, the number of insolvencies would inevitably be reduced.”

Recent figures show that over 24,000 insolvencies (IVA and bankruptcy orders ) have been declared in England and Wales during the first quarter of 2008.

Are You Declaring Insolvency?

Before you declare yourself bankrupt, you might want to consider the possibility of an IVA. An IVA allows you to beat bankruptcy by making reduced monthly payments to your unsecured debt for an average period of 60 months.

Once your IVA term has been completed, any unpaid debt will be written off.

For free IVA advice or information about other debt solution services, please call our One Advice IVA advisors on freephone 0800 048 1752.

Bankruptcy? IVA? They are both debt solutions but if you are struggling with your debt you may be unsure about the differences between the two and how it could affect you. Always seek expert debt advice, especially if you are thinking about declaring bankruptcy. IVA  means that you could avoid bankruptcy.

Please speak to our specialist debt advisers who will go through the differences between the two so you are aware of how both of these can effect you. Call now!

Bankruptcy

IVA does not offer some of the same consequences as bankruptcy. If you are a homeowner you may find that an IVA is a more suitable debt solution as you don’t have to lose your home (although you may have to release some of the equity).

Further consequences of bankruptcy include:

• You lose control over your financial affairs as they will be under the control of a Trustee.
• Assets can be sold in order to pay your creditors, this can include your home or car.
• Details about your bankruptcy order are always publicly advertised.
• You could be required to make regular payments for up to three years.
• Some debts cannot be included in your bankruptcy, such as court fines.
• These are only some of the long term effects, so always seek expert advice about bankruptcy.

IVA

If you fit the criteria for an IVA, it is often the best debt solution available. But nothing can be said for certain until you speak to a professional IVA adviser. They will take details of your income and outgoings so they are in the best place to help you find a debt solution.

Advantages of an IVA include:

• Unaffordable debt will may be written off on completion of the IVA.
• You only repay what you can afford over a typical period of 60 months.
• You don’t have to risk losing your assets
• You avoid declaring bankruptcy.
• An IVA is not advertised, although details are available online.

Do you think a spare £4.2 billion could come in handy? It seems that many of us are failing to take advantage of available pension and child tax credits and are missing out on £4.2 billion in tax credits.

According to research by Unbiased.co.uk, over a quarter of pensioners could leave their pension credits untouched, meaning that there will be £2.4 billion of unclaimed cash. Another £1.85 million will be unclaimed by the 8% of families who have the right to child tax credit privileges.

Making a claim is simple. You can ask for a form from the Tax Credit Helpline. If you claim other benefits, such as Income Support or Jobseekers Allowance, your Jobcentre Plus should be able to help you with your tax credits claim form. The good news is that if you are not sure if you qualify for tax credits it is still worth making a claim, and they can only be backdated three months from the date of application.

David Elms, Chief Executive from the website, said: “People are missing out on record quantities of money by failing to claim tax credits to which they are entitled. The system has been set up to help those on lower incomes and quite simply if you don’t claim your credit, it expires.”

Do you have five or more credit cards?

More than 3m Brits do, with many spending way beyond their means and facing unpayable monthly bills. Typically the worst serial credit card offenders are those between 35 – 44 years old. Many are willing to freely admit that they were at breaking point with their finances, as they try to juggle multiple debt on multiple cards.

Credit Cards should only be used as an emergency backup and you should not ‘live’ on your cards. This will only lead to more debt, and high-interest repayments. One Advice believes that it is important that you get this type of spending under control as soon as possible. If you find that you need to pay your credit card bills with another credit card, or you regularly draw out cash as a means of living – you need expert help.

Credit Card Help is Available

There are ways to relieve the burden of debt and pressure from creditors who are demanding you to pay what you simply can’t afford. You might want to think about a Debt Management Plan which is suitable for those with multiple debts. One Advice can negotiate with creditors and find you a lower monthly payment, leaving you with more money in your pocket.

If you are facing debt over £15,000 then you might want to consider an IVA, this is Government legislation designed to reduce your debt. Contact One Advice today on 0800 048 1752.

This is the second guest post by Mr Credit Card from www.askmrcreditcard.com. As the name of his site implies, Mr Credit Card reviews lots of credit cards. You can apply for a credit card at his site. (By the Way – the site and the following article is US based. Before taking on board any advice which you come across on the Internet you should always make sure that it is tailored to your country of residence as policies do vary).

Establishing credit in the US is kind of a funny business. This country is so credit dependent that a lot of people’s finances revolves around having a good credit score. There are three credit bureaus in the US – Experian, TransUnion and Equifax. To actually get a good credit score, you actually need to have credit! If you are a pay everything in cash person (which is actually being prudent), you will not get a score as high as you could. And that will impact things like the rates you get for your mortgage, car loans etc.

There are several ways to establish credit card in the US. You simply have to take out loans. If you buy a house and get a mortgage, your mortgage payments get reported to the credit bureaus. Consistent timely payments over time will allow an individual to rebuild a good credit. The same thing happens when you take an auto loan or a secured or unsecured loan from a bank. Your timely payments will contribute positively to your credit score.

The only problem with getting a mortgage or auto loan before you establish a credit history is that you will pay a higher interest than necessary. So what is the best way of establishing a credit history? Answer – get a credit card.

Yes, that is right. Getting a credit card is the fastest way to establishing a credit history. But what type of credit card to get? There are a couple of alternatives to consider. (more…)

The average household will pay almost £1 million on household essentials, such as bills, rent and insurance, in their lifetime.

According to Confused.com, we spend £18,114 annually on household bills which totals £941,956 for homeowners from the age of 18 to 70 years old. A proportion of the household bill spend is taken by  loan and credit card debt repayments, as we spend £2,790 trying to become debt free, which is the equivalent of £145,111.20 over a lifetime.

Other yearly household bills include:
£6,182 for rent or mortgage payments
£1,476 for insurance
£1,167 goes on gas, electricity and water

Worryingly, 17% are ignoring their financial commitments in the hope that these household bills and costs would disappear. Over half (55%) of those polled said that they are struggling to make ends meet.

Confused.com spokesperson, Gareth Kloet, commented: “Bills are an unfortunate fact of life and very few of us really stop to think about how much we’re paying out each month.”

“When you see just how much it all adds up to, you can start to see how much you can save when you shop around to get the best deals.”

If you feel as though you are losing your grip on debt, it is vitally important that you know the two types of debt you need to understand. This could put you back in control of your debts or help you understand how you should deal with these debts moving forward.

The two types of debt that you need to understand the differences between are:

1: Non-Priority Debts
2: Priority Debts

Why Should I Know the Difference Between These Two Types of Debt?

Both Priority and Non-Priority Debts are two completely difference types of debt and if you are struggling to meet your debt repayments it is vital you understand the differences and the potential consequences of missing repayments.

Non-Priority Debts: These type of debts include credit cards, store cards, overdrafts and unsecured loans.

Priority Debts: These type of debts include mortgages, secured loans, tax and utility bill debts.

Just because a debt is ‘non-priority’ does not mean that you can go without paying it, but the consequences of doing so are generally less severe than missing priority debt payments.

Always ensure that your budget allows you to make the required payments to your priority debt. Failing to do so can lead to serious consequences. For example, missing mortgage payments can lead your mortgage lender to start the process of repossession against you and you could lose your home.

How Can I Afford my Non-Priority Debts?

If you are worried about your ability to repay your debts then it makes sense that you would look for a way to make those debts more affordable to you, and a Debt Management Plan can do just that.

The amount that you need to make to your non-priority debts, through a debt management plan, is tailored to your individual circumstances. This means that you should be able to afford your priority debts as this will have been accounted for.

For more information about the two types of debt, and if you are unsecured if your debt is a priority or non-priority debt, please get in touch. Our One Advice team are on hand to offer you debt advice and can help you to deal with your non-priority debts by making them affordable which will, in turn, make your priority debts much more manageable.

More than half of Brits owe nearly £6,500 each in unsecured debt, such as credit cards, store cards, overdraft or personal loans. According to the Guardian Group Financial, 7% of people owe between £10,000 and £15,000, and 3% are struggling with unsecured debt over £30,000, so it is no wonder many of us could be losing sleep over unsecured debt levels.

It seems that we are in need of professional debt advice as many of us are struggling with unsecured debt in the current financial climate, as over a quarter of people have run up credit card debt buying for essentials such as food (29%) or to pay utility bills (22%).

Gary Forrest, from the Guardian Group Financial, said: “Consumers need help to face up to and manage their debt problems and regain control over their lives – not to receive yet more pressure from the credit companies. This dangerous trend has to stop.”

Unsecured Debt – Are You Losing Sleep?

The research also revealed that half us are worried about how to manage our debt, and worryingly 4% are losing sleep over their debt worries.

You don’t need to lose sleep any longer; there are a number of debt solutions on the market and one of these could be perfect for you. It can sometimes be tricky knowing which debt solution you are most suitable for which is why you should seek professional debt advice.

One Advice have an expert team of debt advisers who could suggest one of the following debt solutions:

Debt Management Plan: An informal agreement between you and your unsecured creditors. You agree to pay a single reduced monthly payment to your debts and, as the plan is tailored to your circumstances, you should have enough to meet your secured debt repayments.

IVA: Like a Debt Management Plan, you make reduced monthly payments to your creditors. But there are vast differences between the two debt solutions. An IVA allows a certain amount of debt relief, so you can pay what you can afford over a 60 month period and any unpaid debt will be written off on successful completion of the IVA.

Bankruptcy: Should always be seen as a last resort after alternate debt solutions have been explored, as there are long terms consequences of bankruptcy which cannot be avoided. However, if you believe that bankruptcy is the only option, One Advice do have a dedicated bankruptcy service who can help you through the bankruptcy process.

This is only a basic overview of the debt solutions which could be available, if you are struggling with your finances or losing sleep over unsecured debt please contact us direct on  0800 048 1752.

There have been dramatic increases in the number of middle-class families that are plunging deeper into the red, with debt agencies becoming overwhelmed with requests for help from households in more affluent areas.

Financial problems are now sweeping through middle Britain, with many professionals at breaking point with their debt. This has been blamed on household budgets being pushed closer to the limit, with the rising costs of living, increased inflation and the end of many fixed-rate mortgage deals. The rise in those seeking help is being blamed on years of cheap credit which saw people overstretching themselves by borrowing more than they can afford to pay back.

Further reports suggest that there has been an 85% in people looking for help with their debt with the biggest rise seen in the middle-class Tunbridge Wells, up 234%. Co-ordinator of Transact, Jamie Elliott, said: “The face of debt has changed. Since the credit crunch started, there has been a big increase in professionals and home-owners coming for help – you just didn’t see these people before at all.”

Mr Elliott predicts that this situation will get worse, and said that there are countless examples of those on excellent salaries who are still feeling the burden of debt, one of which includes a television producer earning £70,000 a year who had acquired over £50,000 of debt.

Knowing which debt solution can often be tricky. After all there are a number of debt solutions on the market which you may, or may not, have heard about:

• Debt Management Plans
• Individual Voluntary Arrangements (IVA)
• Debt Consolidation Loans
• Bankruptcy

These are just some of the potential debt solutions and the one which is right for you can be dependant on a number of factors. Expert debt advice can help you to discover which debt solution is the best way to go about tackling your debts.

How Do I Know Which Debt Solution Is Right for Me?

Getting specliase debt advice can really help you to understand which debt solution is right for you.

This type of advice means that you will have to provide basic information about your finances, such as how much you earn, how much you owe and your outgoings. Don’t worry if you are not 100% sure about what your exact outgoings are; our debt advisors are specially trained and can help you work through your outgoings.

Once you have gone through your details, we will be in the best place to tell you which debt solution is right for you. Dependant on your situation, you may benefit from making your unsecured debt repayments more affordable with a debt management plan or be able to be debt free in as little as 60 months with an IVA.

No matter which debt solution is right for you, One Advice are here to help.

Students worrying about student loans and debt are to receive debt management advice which aims to offers tips on how students can get their financial management under control.

The charity, National Skills Academy for Financial Services (NSAFS),plans to visit colleges and universities this September and October and ask students to take a Money Pledge, where students commit to taking on board the debt management advice by managing their finances responsibly.

The Money Pledge will identify six financial areas which are of most concern to students: bank accounts, savings, mobile phones, loans and mortgages, university fees or debit, credit and store cards.

This moves comes as an increasing number of graduates fail to find work after university and are left with personal debt problems, therefore meaning that some have to take professional debt management advice.

Sylvia Perrins, chief executive of NSAFS, commented: “The current economic environment has highlighted the importance of ensuring our nation is more ‘money-minded’. Colleges have an important role in shaping the future. Providing their students with an opportunity to become more financially astute is fundamental to our individual and national prospects.”