We all worry about different things. But, being in debt is definitely a worry. Very few people can handle being deep in debt without it playing on their mind, to the extent where it begins to affect their mental well-being. That, in turn, has a negative impact on all aspects of their life. So, getting out of debt is something that really needs to be made a priority.
Below, I have summarised details of some of the ways people who live in the UK can potentially get themselves out of debt. You can get help from Creditfix to implement all of them if you feel they are right for you.
I am not a financial advisor, so the details below are just an overview of some of the options that are available to you. So, before you decide, please do some further research or seek independent advice about the approach you are considering using.
Individual Voluntary Arrangement (IVAs)
You and your unsecured creditors can come to a formal agreement about how what you owe them is to be repaid. The amount you will repay each month is agreed. The whole process is supervised by an Insolvency Practitioner (IP).
They act as a mediator between you and your creditors, which eventually takes much of the strain off of you. Plus, you pay the IP a single payment each month. They then divide that cash amongst your creditors. Even if you are self-employed it may still be possible to arrange an IVA. A similar scheme exists in Scotland.
A Trust Deed
However, your IP may recommend that you set up a Trust Deed instead. Again, you end up making a single monthly instalment, which is used to pay off your unsecured debts.
A Debt Arrangement Scheme (Das)
Scotland has a slightly different arrangement than the rest of the UK. But, their Das scheme also enables you to switch to making a single payment, each month.
An Administration order
If you have County Court Judgements that you need to sort out, you may benefit from using an administration order. It can be used to prevent your creditors from taking more legal action against you. Importantly, it can also help to protect your assets.
Bankruptcy and sequestration
Becoming bankrupt is a very serious step and it is not something you should do without taking sound independent advice. You need to fully understand the long-term consequences of taking this step before doing so. But, for some people, it is the right solution.
If you live in Scotland it is called sequestration. It is similar to bankruptcy, but, there are differences. So, if that is the process you will be following, be sure that the advice you are given is applicable to that situation.
There is no need to handle your debt alone
As I mentioned at the beginning of the article, being in debt brings a lot of stress with it. If you are feeling overwhelmed or think your mental health is suffering, be sure to seek help for that as well. There is no need to tackle your debt alone there is lots of help available. You will also find this article to be relevant and useful.