We all have weaknesses in life. There are people that find managing money easy and there are some that, for whatever reason, find themselves losing control. We are all human but there seems to be some sort of taboo around debt. As if you should feel great shame should you not be able to pay off your credit cards each month.
People get into debt for all sorts of reasons. You might have lost your job and be finding it difficult to make ends meet. You may be suffering from depression and find day to day tasks difficult to face. You may have had a misspent youth and have never quite been able to get back on top of things. It doesn't make you a bad person.
If you do find yourself not being able to cope there are people out there that can help you get back on your feet.
Charities such as Step Change, National Debt Line and the Debt Advice Foundation (amongst many others) can give you free independent debt solution advice. They will talk through your finances without judgement.
The three most common solutions offered are a DMP (Debt Management Solution) an IVA (Individual Voluntary Arrangement) and bankruptcy.
1. DMP
A DMP is suitable for people struggling to keep up with their normal debt payments but who still have money available to them after all essential living expenses are paid.
A debt management plan (DMP) is usually arranged on your behalf by a third party provider, for example a debt charity or debt management company. This means you’ll make a single monthly payment to the DMP provider and they’ll contact all of your creditors and send each of them a share of your payment every month.
2. IVA
An individual voluntary arrangement (IVA) is a formal agreement allowing you to make affordable payments to your debts, usually over five or six years. At the end of your IVA any unsecured debt left is written off. You can also make a one-off payment known as a lump-sum IVA.
3. Bankruptcy
Bankruptcy is a debt solution and a form of insolvency. It’s a legal procedure mainly suited to people whose circumstances are unlikely to change and who have little hope of paying off their debts within a reasonable time.
Of course there are other debt solutions such as a debt relief order, a debt administration order, debt consolidation and many others depending on which part of the UK you hail from.
Rest assured, no matter how big you feel your problems are there is ALWAYS as solution. Taking that first step to get help will bring great relief and in time, with hard work, a debt free life.
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