How Easy Debt Repayment Programs Work?

By Author: ClearInsolvency
Total Articles: 20
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If you are struggling with mounting debt burden, this article will definitely help you by offering some trusted ways in this regard. Here, we will discuss how debt repayment programs like debt management, IVA and bankruptcy work. Every repayment program has its own unique dynamics. Before choosing one you need to be aware of its pros and cons and make a decision keeping your current financial condition and repayment capacity in mind. They are financial procedures. Hence, you might find some difficulties to understand their jargons. This article simplifies those jargons and helps you to remain debt free easily.

What is debt management and how it works?

Debt management is the process of unifying all your debts into a lower interest and single loan plan and paving the way for easy repayment. Both government and private debt management agencies can help you in this regard. In the beginning of debt management plan, the agency evaluates your debt burden, income and expenditure and agrees an affordable monthly amount of repayment. This monthly outgoing will go to your creditors whilst allowing for all ...
... your day-to-day living expenses. This process creates a single point of contact for your debt repayment. Debt management will come with a debt consolidation loan. It will help you to get rid of high interest loan plans like unsecured loans, credit cards, and store cards and over draft.

IVA-process and benefits

Growing number of defaults has paved the way for individual voluntary agreement. Here, an insolvency practitioner arranges a meeting of your lenders to figure out a long term and easy repayment plan. When 75% of your lenders agree to the plan a plea regarding this is filed at court. Hence, this is a legal binding plan where you repay your debts according to your income, expenditure and repayment capacity. The tenure of IVA agreements is five years and after that you are declared debt free even if you have not repaid the entire loan amount. During this tenure the lenders can not repossess your property to get back their money. Your IVA agreement is highly confidential and is not publicized. You can raise fresh credit too during this period.

Bankruptcy- The last resort

There are some times financial instability is out of hand. At such irreparable financial situations you can resort to bankruptcy. Both individuals and organization with acute incapability to repay the debt burden can apply for bankruptcy. It is legal binding and a suit needs to be filed in this regard at court. According to the instructions of court, your assets are fairly distributed among your creditors. This liquidation process is generally completed with in twelve month. During this period you are entitled to bankruptcy pension. However, after filing for bankruptcy you are debarred from fresh credit facilities for next few years.

You can find all relevant information related to debt management, IVA and bankruptcy on internet.

About US: Always choose the creditor who offers debt insurance. Like this, there will be no action held against you in case you are unable to pay the debt. Pay your bills and other charges on time. For more details please visit bankruptcy.