Not all debt is bad. Debt becomes bad when you cannot afford to repay your credit commitments. In some cases this is where the level of debt is very high, but not always. There are many people who owe small levels of debt but still can’t afford their repayments.
Always seek expert professional advice. There are a number of rogue companies who will gladly help you get into more debt!
Our One Advice advisors are on hand to help you find the debt solution which is right for you. Call now on 0800 019 5870 or take the Debt Test to see your options.
Obtaining an unsecured loan at a sensible interest rate is always difficult if you are financially stretched or have been refused in the past.
If we assume that you have already explored borrowing from your bank or building society or increasing the limits on your cards and still have a requirement for additional borrowing, then the truth is that you are probably already financially stretched. You probably don’t need to borrow more money, but rather you need to make your existing debts more affordable.
If you qualify for an IVA, it is invariably the best solution for you, as it is the only solution that avoids bankruptcy and will write off a large proportion of your debt.
Every other solution (except bankruptcy) will increase both your debt and the term of your repayments. If you qualify for an IVA you would only pay one affordable monthly payment, interest and charges would be frozen, your creditors would stop chasing you and at the end of your IVA, typically 60 months, all the unsecured debt that you haven’t repaid is written off.
An additional benefit of an IVA is that as a homeowner, your IVA could protect your home from your creditors and bankruptcy proceedings.
Consolidating all your unsecured debts into one affordable secured payment may be an option. If you have more equity in your home than you have unsecured debts, it may be possible to qualify for a secured loan, consolidation loan or a re-mortgage.
Providing that you can afford additional borrowings, this could be a good option for you. If you have less equity than your unsecured debt, further borrowing against your home will not be appropriate for you as it would still leave you in debt and could put your house at risk.
Never secure your unsecured debts on your home if you think you may struggle to make the repayments in the future, because you are putting your home at risk. Seek expert help to determine whether you can afford the repayments and remember that the salesperson you are speaking to does not have your best interest at heart, but is thinking of the commission that they will earn from your loan!
Bankruptcy should only ever be considered when all other options have been exhausted. Only take professional advice from a Licensed Insolvency Practitioner.
If you are considering a Debt Management Plan, then the chances are that you debts are spread out over a number of different creditors and have perhaps been built up over a number of years.
We believe that every case is different and your individual financial circumstances are unique to you. This is why One Advice has expert advisors who are able to talk through your finances and help you to come to the best decision.