Debt management blog
Tips, help and information for people with all kinds of debt issues
What’s the difference between an IVA (Individual Voluntary Arrangement) and a debt management plan from a debt management company such as Gregory Pennington?*
If you’re if debt, of course, the real question is: “Which would be better for me?” Take a look at the most important similarities and differences.
As anyone on a debt management plan will know, budgeting can be an eye-opening experience. Actually writing down where the money goes can be an unwelcome – but essential – ‘reality check’.
Keeping track – an essential part of debt management
For example, research from the Co-operative Bank Savings indicates that the average British family spends around £5,000 per year entertaining the kids! If that sounds far-fetched, it just shows the importance of keeping track of your finances, and why it’s such a vital part of any debt management plan: the big expenses are easy to spot, but it’s the little expenses that really add up.
If you have an overdue debt that you do not think you will be able to repay in full, some creditors may accept a ‘full & final settlement offer’. This is an offer to your creditor(s) of a lump sum in order to settle your debts. This lump sum is unlikely to be for the full amount: if you’re in financial difficulties and your creditors aren’t sure they’d ever get the full sum, they may well prefer to get some of it now than hope to get all of it in the future.
There are a number of reasons why your creditors may accept a full & final settlement offer...
It’s a mistake to think the courts are only there to help creditors. If you’re having problems keeping up with monthly payments to your debts, you may be able to ask the County Court for an Administration Order (see ‘Do I qualify for an Administration Order?’ below).
An Administration Order would group all your debts together and lay down how much you can afford to pay towards them all each month. You’d make just one monthly payment to the Court, which would then pay each creditor an agreed amount. The Court would also take a small percentage of the money to cover costs.
If you’re having problems managing your debts, you’d undoubtedly find it easier if you could increase your disposable income: raising your income, lowering your expenditure, or both.
Of course, wages aren’t the only form of income, but far too many people aren’t aware of what they’re entitled to. The government estimates that billions of pounds in benefits are going unclaimed across the UK.
Here are just some of the benefits available to UK citizens. Are you entitled to any?*
If you’re having problems managing your debts, you’d undoubtedly find it easier if you could increase your disposable income: raising your income, lowering your expenditure, or both.
Of course, wages aren’t the only form of income, but far too many people aren’t aware of what they’re entitled to. The government estimates that billions of pounds in benefits are going unclaimed across the UK.
Here are just some of the benefits available to UK citizens. Are you entitled to any?*
A statutory demand is a demand for payment of a debt over £750. It’s also a warning that your creditor may start bankruptcy proceedings against you if you don’t pay within 21 days. A creditor does not need to get the court involved to serve a statutory demand.
It’s worth noting that no-one can push for bankruptcy unless you owe them £750 or more. So if you receive a statutory demand, you could consider paying enough of the debt to bring the total under that minimum. This isn’t the best way of managing your debt – and you’ll still need to deal with the remaining debt – but at least you’ll no longer face the immediate threat of bankruptcy.
Many people with multiple unsecured debts look into debt management or debt consolidation as a way of reducing their monthly outgoings and simplifying their finances.
The option that’s right for one person may not be right for another, since debt management and debt consolidation both have their benefits and drawbacks. So it’s a decision they should only take after talking to an expert debt adviser – and one of the factors that adviser will consider is the cost and availability of a debt consolidation loan. Clearly, that can vary from person to person and from month to month, as the credit market goes through good times and bad times.
What is County Court action really like? On television, courts tend to be shown as glamorous places where defendants make passionate, witty speeches to solemn judges and fascinated juries. So depending on the kind of person you are, the thought of going to County Court could be either exciting or terrifying.
But real life is very rarely like TV.
Council Tax pays for local services, from policing to refuse collection. It’s a priority bill, which means paying it is even more important than paying your non-priority bills (such as credit cards or unsecured loans), as the consequences can be much more severe.
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Subject to status. Conditions Apply. Repaying debt over a longer period may increase the total amount to be repaid
Your ability to obtain credit will be affected in the short term and might be affected in the medium to long term. Fees payable.
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