Financial Utopia – Help with credit cards, debt savings and loans.

Entering into an Individual Voluntary Arrangement, or IVA, can be a massive shock to the system, particularly because of the more modest lifestyle you are required to adopt. Many people might find themselves in large amounts of debt through relying on credit cards, store cards, loans and generally spending more money than they have. But in order to keep up with an IVA this has to stop.

Once you enter into your IVA, you will be expected to live on a reasonable but modest budget; through doing so, however, you can start to control your outgoings, repay your debts, manage your money more responsibly and climb successfully out of your debt.

Living with an IVA is not impossible, nor is it a curse; and it will be beneficial to learn to live within ones means and be happy to do so.

Your Individual Voluntary Arrangement will have been planned by an experienced Insolvency Practitioner who, having studied your incomings and outgoings, calculated an appropriate amount to repay each month, within your current means. Changes to your financial situation, during the term of your IVA, should always be discussed as quickly as possible with your Insolvency Practitioner, so that your situation can be re-assessed and your payment plan and payment forecasts amended.

You will live with your IVA for 5 years (but for extenuating or remarkable circumstances). After the term of your IVA has been completed, your debt will have been removed and all that will remain will be a record of the IVA proceedings which remains on your file for a further 12 months.

Once free from debt, and from your Individual Voluntary Arrangement, it is important that you do not simply lapse into your previous bad habits; which caused your debt problems originally. Take on board the skills of organisation and moderation that you have developed and enjoy a debt free life.

When people are in debt there are a number of options that can be explored. The best one for you really depends on your circumstances and how much debt or uncontrollable debt you are really in. The best way to assess this is to be honest with yourself. Get all your paperwork out and list your debts one by one. At this stage dont miss any out because you feel we can handle that one. The art of dealing with debt is to look at the whole picture and deal with it all in an honest, open and critical way in order to choose the best vehicle to manage and eventually get out of debt. Which ever way you choose to get out of debt you must be committed to it. For example; an IVA or voluntary agreement usually plans around a five year plan. Therefore, too must be committed to the terms and conditions for five years to get out of debt. On the other hand a debt consolidation secured loan can be set up from five to thirty years. The important factor with the debt consolidation secured loan is to feel comfortable with the monthly repayments and that you can commit to this payment without leaving you short. If you leave yourself short you will end up creeping back into debt as you borrow bits here and there and end up back at stage one. In this case I believe that you should spread your repayments for as long as it takes making sure the monthly repayment is honestly affordable. This way you can begin a fresh with your finances only concerning yourself with one monthly repayment and never letting yourself get into debt again. When you take out a debt consolidation secured loan you must really see this as a fresh start, a new beginning of your financial life so once the secured loan is complete cut up all those credit cards. When loan adverts and applications come through the door rip them up. However, before we go into detail about the debt consolidation secured loan lets look at all the options you can consider to get yourself out of debt to ensure that you have made the right decision.

Debt Consolidation Secured Loan

A Debt Consolidation Secured Loan is a way of merging all your debts into one simple monthly payment. This monthly repayment is often a lot lower than you will be paying for all your debts at the moment. Anyone would be happy with lower monthly repayments. As mentioned earlier you can spread your repayments over a longer period and often the interest rate is lower , often a lot lower! Do be aware though that if your loan id over a longer period you will be paying interest over longer and so the overall actual repayment could in some circumstances be larger.

An IVA is known as the step before bankruptcy. It will effect your credit rating for some time and therefore I believe this avenue should be explored only when a secured loan or other debt managements plans are unavailable to you. An IVA is an official debt repayment plan that, in most cases can reduce the interest you are paying on your debts , sometimes even freeze the debts. It can sometimes reduce the total amount of debt that you owe. An IVA can also give you legal protection from the companies that you owe money to.

Debt Management plans

Debt management plans are an informal process of negotiating with your creditors. Again they can freeze or reduce the interest that you are paying. They can offer extensions on your debt repayment terms or periods of time the debt is spread over.Debt management plans can also sometimes involve writing off some of the debt you have. You should be aware however that these too can effect your credit history. They also often have providers hefty fees written in to the plan. These have on some occasions just increased the money owed dramatically. This has been hidden from customers by concentrating only on the management of a monthly repayment.