Alternatives to Debt Consolidation
If you are struggling with your debt, there are a number of debt solutions which you may consider. Alternatives to debt consolidation are something to consider as not everyone is suitable for a debt consolidation loan.
There are a number of debt solutions which require no further borrowing but still allow you to manage your debts with a lower monthly payment. The best way to understand what alternatives to debt consolidation are available is to get expert debt advice and One Advice can provide you with just that, call now for personalised debt help – 0800 048 1752.
The main advantage of a debt consolidation loan is that it makes your debt more manageable by reducing your debt repayments, as your new debt consolidation loan is designed to pay off your outstanding unsecured debts. It can also simplify your personal finances as you only have to make one payment to your unsecured debt per month. However, there are alternatives which allow you the same advantages without taking out another loan.
The most common alternatives to debt consolidation are:
- Debt Management Plan – A Debt Management Plan is an informal agreement between you and your unsecured creditors where you make one affordable payment to your debts. There is only one payment to make, to us, and we will distribute this fairly between your creditors so you don’t have to worry about multiple debt repayments throughout the month.
- Individual Voluntary Arrangement (IVA) - Like a Debt Management Plan, an IVA allows you to make a single reduced payment to your debts but offers additional benefits. You commit to repaying your debt over a typical 60 month period at a rate that is affordable to you. On completion of the IVA any unaffordable debt will be written off.
It is important to note that an IVA is a formal, legally binding agreement between you and your creditors and to avoid bankruptcy you must commit to making the agreed repayments.
Remember that with dealing with your debts, there are alternatives to debt consolidation. For free help and advice about the range of debt solutions available, call One Advice now on 0800 048 1752.
on March 11th, 2010 at 2:48 pm
Debt consolidation is a very fact specific decision for a consumer. I find the key is to determine if the consumer will be able to pay off the debt in a reasonable time frame. If the consumer has some money, often times, debt settlement may be an option. In other cases, if the unsecured debt is so high, bankrutpcy may be the rigth decision. The bototm line is that there are as many possible debt solutions as their seem to be debt problems.
on April 16th, 2010 at 1:01 pm
Agreed.. there are many possible debt solutions, which is why it is importnant that you get expert debt advice.