4 Practical Tips for Debt Management and Relief

As you work towards building your investments, you should also monitor the money that you owe. When it comes to managing your financials, one common problem that you …


As you work towards building your investments, you should also monitor the money that you owe. When it comes to managing your financials, one common problem that you may face is debt. This issue affects millions of people every year. But it doesn’t have to be something that completely throws you off track. In fact, there are many useful resources and approaches you can turn. These are resources for effective debt management and relief. Read on to learn more about these tools and how to get back to what matters.

Individual Voluntary Agreements

If you live in the United Kingdom, an individual voluntary agreement (or IVA) is one way to manage your debt. An individual voluntary agreement is a formal alternative to bankruptcy. If you want to know how to apply for an IVA, the process requires different contracts. Typically, you would meet with an insolvency practitioner. They would arrange one between you and your various creditors.

The practitioner will help you come up with a repayment plan that he or she then sends to your creditors. Although timelines and circumstances are different for everyone, the most common length for a repayments plan with is about 5 years. After this period, the debt is done. Although it may not pass, it is worth a shot depending on your situation.

Using a Debt Management Company

Similar to individual voluntary agreements, there are companies out there that can help you manage what you owe. There are a wide variety of debt management companies offering their services. What they usually do is contact your creditors for you and try to negotiate different payment plans.

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To do this, these types of companies will charge you a monthly fee while they work with your creditors. Sometimes how much that fee is depends on how long you want the process to take. If you don’t want to use one of these companies, you may also be able to reach out to your creditors directly and negotiate payment plans.

Credit Scores and Relief Programs

If you do decide to use a credit management company, you should be aware of how it might affect your credit score. There are few ways that it could potentially impact it. In their negotiation process with your creditors, a company may change when payments are due. This may cause your payments to appear as late, thus lowering your score.

While you are enrolled in a credit management program, your creditors may close your accounts. Unfortunately, this could potentially remove any good credit history that you have built up. However, it can still be a good decision in the long run, especially if your situation is serious. At the end of the day, being debt-free will help you keep up your credit score.

Apps and Online Tools

In addition to big companies that can help when you owe money, there are also other,smaller resources at your disposal. There are a growing number of online websites and smartphone apps for debt management and relief.

For example there are several calculators that you can use online for free or by signing up.You just enter your situation-specific information and calculate how long it will take you to pay off what you owe. There are apps you can use to check and track your current payments. With these, you can make sure that your payments have gone through and that they have been made on time.

Once you get ahead of your debt, you are sure to feel more confident financially. You can get back to investing and building up a solid foundation for the future.

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