Debt Consolidation Manchester - Francis & Associates

Individual Voluntary Arrangements(IVA) Should I consider an IVA? If you have debts over £15,000, 3 or more creditors and a regular income, then you could qualify for an IVA. An IVA was introduced by the government in 1986 as a viable alternative to bankruptcy. It is an arrangement between you and your creditors if approved. You make an affordable and agreed monthly payment for a period usually 60 months. At the end of the term the remaining debt is legally written off as part of the arrangement. An IVA can only be arranged with the assistance of a Licensed Insolvency Practitioner(IP). Although an IVA is an alternative to bankruptcy it is still a serious decision to consider and will affect your credit rating. Debt Management Plan(DMP) A Debt Management Plan could be an alternative to an IVA in some circumstances. A DMP is an informal arrangement between you and your creditors and allows you to make a monthly payment you can afford. A financial statement is produced which details your current income and expenditure. The Surplus income is called the disposable income(DI). If you have a sufficient DI then this sum is broken down and an offer of payment is made to each of your unsecured creditors on an equal percentage to the size of each debt. Attached with this offer of payment is the financial statement which shows creditors why you cannot afford the contractual repayments. Creditors are under no obligation to accept the offers of payment and may continue to charge interest or penalties increasing your outstanding debt. They may accept offers if negotiated. If this happens they can freeze interest and charges and review your repayment plan on a regular basis thus reducing your debts and allowing you to make payments you can afford. Full and Final Settlements In some cases your creditors may accept a one-off lump sum payment, which can in some circumstances be significantly less than the total amount owed. They accept the lump sum as a Full and Final Settlement. A Full and Final Settlement is only of use to you if you have access to a large amount of capital, or if you have assets (such as property, vehicles, antiques, investments, saving, and windfalls, etc) that you are willing to sell in order to raise the required amount of money to make an offer to your creditors. We advise you seek advice before you sell anything. A company such as ourselves or your nearest Citizens Advice Bureau can advise you on what to do and help you compile a suitable letter. Any offers made to your creditors need to be made in writing and a copy should always be retained for records. Never send any payment until you have an agreement in writing. If your offer is to be distributed between a number of creditors you have to divide the lump sum using a pro rata calculation similar to that used in a DMP. This will ensure each creditor receives a fair amount if accepted by them. Finally you should ensure the creditor writes to the credit reference agencies to show the debt is 'settled' or 'satisfied' and you should follow this up at a later date by requesting a copy of your credit file. What to do now If you feel any of the above procedures can help or you would just like some free initial advice then contact Francis & Associates today on 0161 924 2210.

Personal Debt Solutions we can facilitate

`Personal Debt Solutions we can facilitate`