debt management plan

The poor Individual Voluntary Arrangement (IVA) in the UK has been taking a beating in the last twelve months but new worries are afoot. Between the creditors hijacking this debt relief solution that falls under the control of the Insolvency Service, other creditors refusing to accept payments in an IVA and now this, we’ll have to have some pity on the IVA.

What Myvesta UK is seeing is a sudden wave of consumers that entered an IVA a year or more ago who can no longer afford their IVA payments. Many are stating they are afraid or reticent to talk to their IVA Supervisor about being unable to afford their IVA payments. People are scared about what it means when an IVA fails or what will happen to them when the IVA fails.

This sudden increase in consumers that are fearful that they can’t meet their IVA payments is a symptom of the greater pressure that is being applied to UK households through an increased cost of living. There is no doubt that fuel and food prices have been rising significantly while wages have not.

That increased budget pressure only means that without additional income, what was once affordable, no longer is. The facts are clear, hard and fast IVA payments that were established a couple of years ago may just simply no longer be affordable. So what options do you have if you can’t afford your IVA payment?

Let your IVA Fail and Make a Second and More Flexible Attempt With Protection From Your Creditors If you simply can’t afford your IVA monthly payment and their is no expectation that you will be able to afford it, then you may have no choice other than to let your IVA fail. If you do this it is unlikely that your creditors will petition for your bankruptcy and instead you could seek protection from your creditors using the legal protection provided under the Myvesta Debt Management Plan.

Under this approach you will be represented by a solicitor and your creditors will be directed to comply with the OFT Debt Collection Guidance and to not contact you, but contact the solicitor instead. This approach can provide a great emotional relief to you.

Continue Your IVA By Just Getting By Each Month Just making it month-to-month with nothing left over is not a reasonable path to remain on at this time. It is pretty clear that the UK economy may be in for a rough ride, costs are escalating and wages are not rising as fast. If you continue in an IVA with a monthly payment that was established a year or so ago and you are having problems affording it then you need to evaluate if you can reasonably expect to make it through the entire 5 years of payments. If you can’t, you may be throwing good money after bad right now. If that’s the case then the sooner you seek advice and decide what alterations you need to make, you won’t be making monthly IVA payments that may not get you out of debt.

Unless you have spare room in your monthly budget, you are expecting an increase in income or you plan to work a second job, it would be wise to anonymously chat with a Myvesta UK advisor online to get an evaluation of your current situation and options.

Go Bankrupt This is the option we are hearing more IVA debtors asking about. They say they are now struggling with the IVA payments no longer being affordable and mentally they have had enough of the stress and pressure that financial problems bring. If you let your IVA fail you can always elect to go bankrupt but if you have some equity in your home then you may be forced to sell your home or give up control of your assets in a bankruptcy. Some people are saying they don’t care, they just can’t deal with their debt anymore and they are willing to walk away from their homes to do it. Certainly a drastic approach but it just shows you how feed up some people are.

While bankruptcy is a legal remedy to debt problems, it is not a course of action to be taken lightly. At the very least, if you have decided that you are just going to go bankrupt, get professional help and advice to do it properly. It is much more affordable to go bankrupt properly than having to go back and try to fix it latter. The biggest mistake people make when they go bankrupt on their own is not filing the proper paperwork to give them proper living expenses allowed by the court in bankruptcy.

But consider this first, before jumping to bankruptcy, take some time to just take a deep breath before making a knee-jerk decision about what you want to do. Here is one option, let your unaffordable IVA fail and enter the Myvesta Debt Management Plan, get legal protection from your creditors and then carefully revaluate your options without fear or pressure. Make a good educate decision about what you want to do so that instead of treading water for past financial sins you can launch into a real plan to get out of debt.

Summary No matter what you decided to do the bottom line should be to consider making some adjustments if you are in an IVA and the monthly payment is no longer affordable for some reason. Don’t panic and certainly don’t feel you have to suffer with this burden alone. The folks at Myvesta are here to help.

Original Article

People are often so confused or uninformed about debt management plans in the US that I wanted to share some truths with you. Here are the five biggest misconceptions people have about debt management plans, in no particular order.

1. Debt Management Plans Are Not Designed for You to Get Out of Debt

   Since the DMP terms are really dictated by the creditors a debt management plan is not really designed to get you out of debt.

   A true get out of debt plan would be created using your circumstances as the starting point and then crafting a plan to allow you to get out of debt from your starting point.

   The DMPs of today, with creditor dictated terms, doesn’t work like that. It tries to get you out of debt using what the creditor wants as the starting point.

2. Debt Management Plans From a Not-Profit Credit Counseling Group Are Not Better

   A debt management plan from a nonprofit, non-profit or not-for-profit charity is not any better or worse than from a commercial or for-profit company. Being a nonprofit credit counseling group does not change the basic security measures necessary for a safe debt management plan.

   A nonprofit charity like a consumer credit counseling office is not much different than a commercial company. Except for the following major issues.

   The nonprofit credit counseling company gets paid for collecting money from you on behalf of your creditors and does not want to “rock that boat” and fight back against creditors if that will reduce their favor or funding.

   The nonprofit credit counseling company “pretends” for the most part to be a charity when in fact they generate the majority of their income as debt collectors.

3. Most People Don’t Get Out of Debt Using a Debt Management Plan

   The majority of people that participate in debt management plans do not make it to completion and thus do not get out of debt using a debt management plan. This is not really a fault of the DMP provider but that a debt management plan takes years to complete and the debtors circumstances can change along the way.

   The majority of Chapter 13 bankruptcy plans fail to complete as well for the exact same reasons. The failure of debt management programs is due to life and time, primarily.

4. Bankruptcy is Often Better Than a Debt Management Plan

   Strictly from a time point of view, bankruptcy can be a better option. When you file bankruptcy the credit report recovery clock starts ticking immediately. In a debt management plan the history of you plan and payments can remain for longer since it can be reported from the date of your last payment.

   Bankruptcy also allows many to get a fresh start and a second chance to start over. Recovering from a bankruptcy is hard but not impossible and the breathing room people get after bankruptcy is often just what they need to move forward, faster.

5. Paying For Help to Get Out of Debt is Good

   The charitable debt management industry fails to inform you that they are paid by the creditors to collect money from you. There is no way around the fact that this can cloud their assistance because they are trying to please their pay masters and the clients at the same time. Which do you think gets the higher priority?

   When you pay for debt help the company you hire is motivated to work for you. You are the client and there is no confusion about who the allegiance is owed to.