subject: Do I Have To Deal With My Debt All Alone Or Can Somebody Help? [print this page] A large number of people are facing difficulties in making both the ends meet. Some people have lost their jobs; some have had to take up extra jobs just to bear their expenses. The financial crunch has impacted everyone. Therefore, a large number of people are facing an economic crisis. Some people have sought help to manage their debts.
The government has recognized the fact that a large number of people are facing debt management problems and have set up counselling services and options like IVA to help people with the economic crisis. Some organizations are offering to help people manage their debts, but you must beware of any offers you receive by mail or telephone.
Nobody is alone in debt problems; nearly everyone has been affected in one way or the other. Most people do not know how to manage debts and have just chosen to accumulate them further. Creditors are pursuing people and threatening them lawsuits. People who are in debt should be aware of the options that they have for managing their way out of debt.
The first option available to you is to contact your creditors and negotiate with them to pay off some or all of your debts. Negotiated agreements may involve making payments from your income. For this, you need to first workout how much your monthly expenses are and for this, you must think your expenses through carefully. People tend to only list items like rent, mortgage payments, groceries, transportation, and expenses of education. What they forget is items like clothing and other such items that they have to buy even if once a year. After deducting your total expected expenditures from your income, you will know how much you can afford to pay monthly. You must ask your creditors to freeze your account. The second option is an inheritance or a lump sum of money from any source. You can offer your creditors to make payments once you receive this amount. You can ask them to freeze your interest till you get the amount and clear your debt.
*They are resident of England, Wales or Northern Ireland (debtors who live in Scotland should consider a Protected Trust Deed instead of an IVA) *They are insolvent - this is generally taken to mean that they cannot pay their debts as they fall due *They have UK debts over 15,000 (for smaller debts a debtor should consider a Debt Management Plan) *They can afford to pay at least 200 per month towards their debts - in effect, the creditors need to get at least 25% of their money back before they will consider starting an IVA *They have a regular income and can afford all their basic living expenses such as food, clothing and utility bills
It is the duty of the debtor to arrange for an IP (licensed insolvency practitioner) to represent him in this process, referred to as the Nominee. It is the nominee who draws up the IVA proposal document, using the information provided by the person in debt. The proposal must show why an IVA is in the interests of the creditors and should include the full details of funds and assets available for the creditors. The nominee then submits this proposal to the court. This is done along with the comments of the nominee on the merits of the proposal.
If there is an impending legal action already filed (example: a possible bankruptcy petition), the nominee can also request the court for an interim order.
Managing debts is a difficult task and people have had to turn to others for help. There are a number of options to manage debts; it is up to you to decide how you want your debts managed.
