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For most of us, debt is a fact of life - the average UK household owes tens of thousands of pounds to creditors. In the wake of the recession, amid high levels of unemployment and a weakened property market, more and more people are faced with debt problems. If you are struggling with repayments, it may be time to seek debt advice from a trusted source - an independent financial adviser. This individual can help you to choose the debt management system that suits your circumstances, taking factors such as your location, disposable income and other variables into consideration. For most people in the UK, there are four common financial solutions to choose from if you are in the red - individual voluntary arrangements (IVAs), bankruptcy, trust deeds or debt management plans. Trust deeds are only available to residents of Scotland, but work in a similar way to IVAs - a licensed insolvency practitioner works with your creditors to agree a payment plan for a fixed period of time. This is generally three years under a trust deed and five years as part of an IVA, although individual circumstances may vary. A debt management plan is for people who owe at least £5,000 to two or more creditors and have a minimum of £100 in disposable income each month. With the help of a debt management plan provider, you can consolidate your debts into one manageable payment and the funds are then distributed to your creditors. Bankruptcy is the fourth - and often least desirable - debt management plan to consider, although it may be a wise choice under certain circumstances. In this situation, a trustee will be appointed to assess your financial situation and you may face stiff penalties from future creditors until you are discharged from bankruptcy. The options can seem overwhelming, so it is essential that you seek out debt management advice from an impartial source to help you make the best decision. Financial advisers can tailor their advice to meet your unique needs and offer you information on the pros and cons of each solution. If you are struggling with debt, get in touch with an independent adviser as soon as possible - they can help you get out of the red and enjoy greater peace of mind when it comes to your personal finances.
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