What are the IVA alternatives?
If you feel that an IVA is not the right option for you or you do not qualify for an IVA then there are other options for you to explore.
- Bankruptcy will clear all your unsecured debts completely.
- You could lose any higher valued assets that you have.
- If you are a home owner then you could face losing your property.
- There are certain occupations that will be affected by bankruptcy.
- Once bankrupt your creditors will no longer be able to take action against you – so all creditor hassle, bailiff threats and debt collection agencies will stop.
- You can be discharged from bankruptcy within 12 months and sometimes even sooner.
Debt Consolidation loan
- A debt consolidation loan will enable you to consolidate all of your debts into one secured monthly repayment.
- In theory you are getting one bigger secured loan to pay off all your unsecured debts and be left with just one lower monthly payment and interest rate than your current debts.
- You need to make sure that you will be able to afford the repayments as failure to do so will put your house at risk of being repossessed.
- A debt consolidation will help out with lowering your monthly repayments, but you must be prudent as failure to keep up with repayments could put your house at risk.
- A debt management plan will require you to make one lower affordable monthly repayment over a certain period until the debt is paid off.
- Due to its informal nature, it offers no legal protection against your creditors and no debt will be wiped off.
- Freezing and stopping Interest and charges cannot be guaranteed either.
- Debt management will lower the monthly repayments and is suitable for people to use in the short term.
- Debt management may be suitable for people who do not qualify for an IVA and may not be suited for bankruptcy.
- If you are exploring debt solutions then usually this may not be an option as you could already have a bad credit rating and find it hard getting a sensible interest rate.
- If you have tried your bank and have been declined then you will probably find it difficult to obtain credit elsewhere at a reasonable rate.
- Exploring the other options mentioned are actual solutions to debt; whereas obtaining an unsecured loan is simply adding to your debt.
- It may be helpful in the short term, but it only contributes to your debt in the long run.