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Debt

Debt Management Plans, Iva's and Trust Deeds

Your Debt management options;

1. Debt Management Plan

2. IVA

3. Trust Deed

Debt Management Plans:

A Debt Management plan is a payment plan negotiated with your creditors based on payments you can afford. There are a number of options you have to start a debt management plan.

1. Firstly you could try to negotiate with lenders yourself which may seem daunting

2. Secondly you could try getting help from the Citizens advice bureau or other charitable organisation, this may give you the guidance you need.

3. Thirdly you could instruct a Debt Managment Company to negotiate with your creditors. These companies offer a professional service and deal with creditors on a daily basis. These companies are would be working for you to get you the best plan you can afford.

It is a personal choice as to which option is best for you. If you don't trust you can keep to a payment schedule or if you don't want all the stress of ringing around your different creditors it may be best to choose a debt management company.

IVA

An IVA stands for Individual Voluntary Arrangement with your creditors over a number of years. In order to be eligible for an IVA you must be considered insolvent, that is you can not afford to pay your debts when they fall due. They are used as an alternative to bankcruptcy as they can allow your creditors a higher return, they also hel avoid bad publicity for the creditor associated with bankcruptcy. An Insolvency practitioner would take you through the process. In order for an IVA to be accepted at leat 75% of creditors need to agree to the terms.

Trust Deed

Trust Deeds are only available in Scotland and work in a similiar way to IVA's. In order for a trust deed to be accepted it needs to be agreed by a majority in number of your creditors and two thirds by value of debt.