Cashfloat is a responsible direct lender offering payday loans online under the new FCA regulations. Cashfloat is trying to HELP YOU as much as we can without putting you under further financial strain. However, we do understand that sometimes life tends to take us on a different journey than we planned. Whether its a sudden big financial expense or a stroke of bad luck, you may suddenly find yourself searching for help with debt management. Therefore, we have put together a comprehensive guide to many of the the debt help options that you can find in the UK today.
Debt Management Companies In the UK – Table Of Contents
Understanding Debt Management Plan In The UK
With a large part of the population in the UK finding themselves in debt, there has been an upsurge in the number of companies offering to manage debt. For those people who are unaware how these businesses work to help clear debts, this is a series of articles relating to debt management. It will cover the promises that debt mangement companies make and some of the benefits and pitfalls that consumers could encounter when they have opted to enter into a debt management agreement.
When Did Debt Management Come To The UK?
The original idea of having a company manage your debt began in the US and was introduced to the UK public in the early 1990’s by the Consumer Credit Counselling Service. This was a charity that was set up to help the growing number of people who found themselves drowning in personal debt. The charity was designed to help with advice about how to avoid future debts as well as offering a solution to the immediate problems caused by debt.
Other Options to Manage Your Debt
Before the introduction of debt management plans there were only two options for anyone who found themselves to be heavily in debt. You could file for bankruptcy, a choice that would leave you unable to get a mortgage, credit card or indeed any form of borrowing besides for expensive payday loans for bad credit. This option could also lead to the loss of your home. Or, you could opt to apply for an Individual Voluntary Arrangement (IVA). This is a legal procedure that involves paying off either all or part of your debts.
Going bankrupt is a very serious matter and there are other ways to approach paying off debts. Applying for bankruptcy should always be a last resort. You can apply online and it costs £655. Once you have been declared bankrupt your assets, including the family home, can be used to pay off debts.
After you have been made bankrupt you face severe restrictions including be restricted to borrow small loans of no more than £500 without revealing your bankrupt status. You cannot act as a director of a business unless the court allows it and you are not allowed to create a new business without permission from the court.
As you can see going bankrupt is very much a last resort and it can have a long term impact on your business and home life.
Individual Voluntary Arrangement
When you apply for an IVA, an insolvency practitioner works out what you can realistically afford to pay each month and then comes to an agreement with each creditor about how much they will receive. However, in order for the IVA to be put into place, 75% of the creditors must agree to it.
Putting in place an IVA costs money. There is a set up fee and then each time a payment is made there is a handling fee. If you fail to keep up payments then the agreement can be cancelled and bankruptcy can follow.
When all creditors have been paid off and the IVA comes to an end it remains on the Individual Insolvency Register for three months.
Debt Management Services
An agreement drawn up by a debt management company involves a structured arrangement that will eventually pay off all your debts. It can run for a long period of time and is arranged so that the monthly payment is affordable. Circumstances are taken into account before the agreement is set up and payments to creditors are arranged on a pro-rata basis. i.e. the creditor with the largest amount owing gets a higher amount of money per month.
However, some debts are of a higher priority than others and a debt management company will take this into account when drawing up a payment plan.
Paying Off Debts
If you have reached a point where you can no longer manage to keep up repayments on multiple debts it can seem like the end of the world. However, there are many ways to achieve financial freedom. This series of articles has been written to provide information and assistance about how to get out of debt.
Amongst other subjects, we will look at where you can go for help, whether it is possible to get a debt relief order, how to choose the right debt management company and debt consolidation. We will also take a brief look at payday loans and whether this kind of borrowing tool is of any use to someone who has a large amount of debt.
Companies that Can Help with Debt Management
There are a large number of companies that manage debt in the UK. In light of the fact that there are many unscrupulous companies which operate in a criminal way and hold onto your money instead of repaying debts, it is important to choose the right organisation if you are intent on following this course of action.
The overwhelming choice of companies can often make it very difficult for someone in debt to see the way forward especially when the stress of owing multiple amounts of money may be clouding your thought process and judgement.
The idea behind the articles is to provide as much information and assistance as possible for anyone who has reached a point where they feel that they are unable to cope with debts that are spiralling out of control.
Hopefully the articles will help you to find a way forward and to deal with your debts without losing your home, your job and your peace of mind.