An IVA or individual voluntary arrangement is an increasingly popular option for people in the UK who are faced with serious debt problems. It was originally an initiative of the UK government, intended to provide an alternative to bankruptcy for small businesses, but is now widely used for personal debt. In the US, the nearest equivalent is debt settlement, which is also a radical alternative to bankruptcy. An IVA has several advantages over bankruptcy, which is a more serious course of action, but it is still a legally binding agreement so should not be entered into without proper consideration.
All IVAs must be handled by properly licensed Insolvency Practitioners, but the initial arrangement is normally dealt with through one of the many IVA specialists now providing this service in the UK. As in any area of work, some are better than others, and given the serious and lasting implications for the person seeking an IVA, it is important to take care to select the right IVA company to deal with your situation. I think it is helpful before applying for an IVA to have a good understanding of what it involves, so I am going to summarise the main points first. Then we can look at what to consider when looking for a company to handle your IVA.
An IVA is designed for UK residents, usually with at least £15,000 of unsecured debt to at least 3 different creditors, though some companies will do it for less than this. Unsecured debt means debt which is not secured against your home, such as a mortgage or secured loan. Unlike a Debt Management Plan, which is an informal agreement with creditors, an IVA is a legally binding arrangement. Provided at least 75% of your creditors agree to it, then any creditor who objects is also bound by it. Therefore if you have tried to set up an informal agreement and it has failed because some creditors will not agree, an IVA can be a way around that situation.
The agreement is normally for five years, and involves a fixed monthly payment to your practitioner over that period. Professional fees for the Insolvency Practitioner are normally built into the monthly payments.
Once you set up an IVA, your creditors can't take any further action against you, and can’t hassle you for payment. Any contact has to be through your Insolvency Practitioner. As they cannot take action during the arrangement, you cannot be made bankrupt during the course of the IVA. However, if you default on payments and therefore break the agreement, you can still be made bankrupt.
There will be no newspaper adverts or other notices that can lead to the stigma sometimes associated with bankruptcy. Neither will you be prevented from working in certain jobs as you would be with bankruptcy.
When looking around for the best IVA specialist, the most important thing to say is that they vary a lot, so do not just go for the first one you come across. Follow reviews and recommendations, and bear in mind some of the following:
It is helpful if the application process is as simple as possible, but remember that one way or another they need to get quite a lot of detail from you, otherwise they cannot give you proper advice. They need to know the facts in order to offer the best alternatives for you. One of the most convenient ways to apply is to submit an online form with some basic details, then they can call you back to get any other information they require.
Apply to more than one and compare not just the repayments offered, but how you feel about the people you are dealing with. Do they treat you as an individual and cater for your particular needs, or are you being squeezed into a box that is more to do with their needs than yours? You will need to discuss all sorts of personal information with these people, so you need to feel comfortable with the individuals concerned.
Be very wary of ridiculous boasts of writing off 90% of your debts. This just does not happen and is misleading. Look for companies that are well established, not newly set up, and which specialise in IVAs and debt management, rather than ones who do a bit of it as an add-on to their other business.
Read recommendations for the most reputable UK IVA specialists.
Sunday, 18 October 2009
Saturday, 17 October 2009
Money To Borrow With Bad Credit - Advice On How To Get Cash When Your Credit Is Poor
A bad credit rating can prevent you getting credit with the vast majority of lending companies. Personal loans and credit cards are likely to be completely out of the question, which can be a real problem when you find that you need extra cash for something.
However, there are certain types of lending that either do not require a credit check at all, or which will still lend money even when there are problems with your credit. There are really two options open to you, depending what your requirements are. If you need a small amount of cash for a very short period, then a payday loan could be the answer. If you need a larger, longer term loan, then your only option is likely to be a secured loan.
Payday loans are never for large amounts of money and are usually just to cover a shortfall until your next salary or wage payment arrives. In other words they are not the solution if you need to borrow money for anything longer than a few weeks. This is important because if you were to go for a payday loan and then find that you could not repay it on the due date, you are likely to be penalised quite strongly by excess charges.
The reason you can get payday loans even with bad credit, are that the lender does not need to care what your credit record is like, as long as you have enough money coming in your next pay check to cover the loan. So the main thing a payday lender will look for in order for you to qualify for a loan is that you have a steady job. Payday loans are for unexpected emergencies and one-off expenses, and should never be seen as a way to tackle ongoing debt problems.
Secured loans, sometimes known as homeowner loans, are an entirely different ballgame. When you borrow money in this way, the loan is secured against a substantial asset that you own, usually your house. This means that your home is legally tied into the loan, so that if you were to default on payments, the lender could sell your house to get their money back.
Because the loan is secured against such a valuable asset, the lender is far more willing to take a chance on people with bad credit, because they know that ultimately they can always recover their loan through that last resort of selling your house. For the same reason, you are usually able to take out a much larger secured loan that you could an unsecured one. Needless to say, with the possible consequence of losing your home, secured loans are not something to be entered into without very careful thought.
If your bad credit report is stopping you borrowing money and you are not sure why your rating is not good, it would be well worth checking your credit report for yourself. You need to do this so that you can ensure there are no mistakes on it, such as records which are simply wrong, bad debts which have been settled, or things which should have been removed by now. US citizens can get one free credit report each year, and UK citizens can sign up for a free trial and see their report free of charge that way.
Find recommendations for direct payday lenders in the US and UK.
However, there are certain types of lending that either do not require a credit check at all, or which will still lend money even when there are problems with your credit. There are really two options open to you, depending what your requirements are. If you need a small amount of cash for a very short period, then a payday loan could be the answer. If you need a larger, longer term loan, then your only option is likely to be a secured loan.
Payday loans are never for large amounts of money and are usually just to cover a shortfall until your next salary or wage payment arrives. In other words they are not the solution if you need to borrow money for anything longer than a few weeks. This is important because if you were to go for a payday loan and then find that you could not repay it on the due date, you are likely to be penalised quite strongly by excess charges.
The reason you can get payday loans even with bad credit, are that the lender does not need to care what your credit record is like, as long as you have enough money coming in your next pay check to cover the loan. So the main thing a payday lender will look for in order for you to qualify for a loan is that you have a steady job. Payday loans are for unexpected emergencies and one-off expenses, and should never be seen as a way to tackle ongoing debt problems.
Secured loans, sometimes known as homeowner loans, are an entirely different ballgame. When you borrow money in this way, the loan is secured against a substantial asset that you own, usually your house. This means that your home is legally tied into the loan, so that if you were to default on payments, the lender could sell your house to get their money back.
Because the loan is secured against such a valuable asset, the lender is far more willing to take a chance on people with bad credit, because they know that ultimately they can always recover their loan through that last resort of selling your house. For the same reason, you are usually able to take out a much larger secured loan that you could an unsecured one. Needless to say, with the possible consequence of losing your home, secured loans are not something to be entered into without very careful thought.
If your bad credit report is stopping you borrowing money and you are not sure why your rating is not good, it would be well worth checking your credit report for yourself. You need to do this so that you can ensure there are no mistakes on it, such as records which are simply wrong, bad debts which have been settled, or things which should have been removed by now. US citizens can get one free credit report each year, and UK citizens can sign up for a free trial and see their report free of charge that way.
Find recommendations for direct payday lenders in the US and UK.
Thursday, 15 October 2009
Online Payday Cash Advance Lenders - Advice And Information On Using Payday Loans
Payday loan companies, or cash advance lenders, are specialist lending organisations, who lend money to people who need relatively small amounts of cash very quickly and for short periods of time. The term payday loan comes from the fact that such loans are normally given on the condition that they are paid back immediately on the borrower's next payday.
These cash advance lenders specialise in helping people out when they find themselves unexpectedly short of cash, usually in unforeseen emergencies or when facing unexpected bills. The loan is literally just to tide them over until they next get paid. For this reason, the criteria for getting a payday loan are slightly different to most other longer term types of borrowing.
The most important thing the cash advance lender wants to know is that you have a job and a steady income. If you can prove that, then it usually does not matter if you have a bad credit record or even court judgements against you. Apart from this, most lenders will require you to be over 18 years of age and a citizen or resident of the country you are applying from. There are many online payday loan companies now, which have fast application processes that mean you do not need to fax through any documents or evidence.
Payday loans should not be seen as a solution to ongoing debt problems. The last thing you want is to get into a situation where you have to extend the lending term on a cash advance loan because you can’t pay it back. Because payday loans are designed to be very short term, the charges and interest rates that apply if they are taken out for longer can be very heavy indeed. If you take out a payday loan and default on it, you will quickly see the charges building up and could soon find that the interest due is more than you originally borrowed. You should not take out a loan unless you are really sure you can pay it back on time.
When looking for a payday loan you should always look for recommendations and compare the charges that will be applied. In the US the charges are often dictated by the state in which you reside, so will vary depending where you live. Some states prohibit payday loans and all states that do permit them issue licenses, so always check that a payday lender is properly licensed for your state. A surprising number of companies operate illegitimately without licenses.
As payday loans or cash advances are usually only for a few days, the cost of borrowing is normally a fixed fee. It does not look like much money because the amounts being borrowed are quite small, but if you look at it as an annual Interest rate, you will see that it is huge compared to other loans or credit cards. Late payment penalties can be even worse. Payday loans are extremely useful and serve a real purpose, but only if you use them for what they were designed for - one-off emergencies, and always, always pay them back on the due date.
If you do have debt problems, then do not be tempted to take out a cash advance. It will not solve your problem and may well make it worse. The only long term solution to dealing with debt is to negotiate settlements with your creditors. The purpose of this is to agree to wipe out as much of the debt as possible, and set new repayment terms for the remainder. You can find free advice online telling you exactly how to do this.
Read recommendations for reputable payday loan companies in the US and UK.
These cash advance lenders specialise in helping people out when they find themselves unexpectedly short of cash, usually in unforeseen emergencies or when facing unexpected bills. The loan is literally just to tide them over until they next get paid. For this reason, the criteria for getting a payday loan are slightly different to most other longer term types of borrowing.
The most important thing the cash advance lender wants to know is that you have a job and a steady income. If you can prove that, then it usually does not matter if you have a bad credit record or even court judgements against you. Apart from this, most lenders will require you to be over 18 years of age and a citizen or resident of the country you are applying from. There are many online payday loan companies now, which have fast application processes that mean you do not need to fax through any documents or evidence.
Payday loans should not be seen as a solution to ongoing debt problems. The last thing you want is to get into a situation where you have to extend the lending term on a cash advance loan because you can’t pay it back. Because payday loans are designed to be very short term, the charges and interest rates that apply if they are taken out for longer can be very heavy indeed. If you take out a payday loan and default on it, you will quickly see the charges building up and could soon find that the interest due is more than you originally borrowed. You should not take out a loan unless you are really sure you can pay it back on time.
When looking for a payday loan you should always look for recommendations and compare the charges that will be applied. In the US the charges are often dictated by the state in which you reside, so will vary depending where you live. Some states prohibit payday loans and all states that do permit them issue licenses, so always check that a payday lender is properly licensed for your state. A surprising number of companies operate illegitimately without licenses.
As payday loans or cash advances are usually only for a few days, the cost of borrowing is normally a fixed fee. It does not look like much money because the amounts being borrowed are quite small, but if you look at it as an annual Interest rate, you will see that it is huge compared to other loans or credit cards. Late payment penalties can be even worse. Payday loans are extremely useful and serve a real purpose, but only if you use them for what they were designed for - one-off emergencies, and always, always pay them back on the due date.
If you do have debt problems, then do not be tempted to take out a cash advance. It will not solve your problem and may well make it worse. The only long term solution to dealing with debt is to negotiate settlements with your creditors. The purpose of this is to agree to wipe out as much of the debt as possible, and set new repayment terms for the remainder. You can find free advice online telling you exactly how to do this.
Read recommendations for reputable payday loan companies in the US and UK.
Wednesday, 14 October 2009
Negotiate Credit Card Settlement - Find Out How To Wipe Out Your Credit Card Debts
The fact that credit cards are so easily available to most of us when we need to spend a bit more than we actually have, is one of the reasons why so many people get into credit card debt. Such debts often mount up gradually and before we know it they have suddenly grown so large that it is beyond our ability to pay them off.
This is when people sometimes jump at the first solution they can think of, which in some cases can often make things worse. Debt consolidation loans, for example, are often used by people to pay off credit cards, but all that happens is that the problem is transferred to another lender, often leading to greater interest payments in the long run. Others consider bankruptcy, which is indeed a serious step and should not be entered into lightly. Bankruptcy will rarely be an appropriate response to credit card debt.
Negotiating a settlement with the card companies or collection agencies is always the best answer to credit card debt. The idea being, to get an agreement to write off as much of the debt as possible to begin with, leaving only a fraction of the debt to pay. It doesn’t matter if you don’t have money to pay off a lump sum, there are ways around that. The main thing is to get your negotiation right and get rid of the vast majority of your debt in one go.
Of course, doing this is easier said than done. Card companies and collection agencies are not always the easiest people to negotiate with, and you will often be met with an unwillingness to co-operate. In this situation many people turn to lawyers and professional debt settlement companies to help, but these people all charge significant fees for their help. There are other sources of advice, and with the right guidance you can manage perfectly well the debt settlement professionals and save an awful lot of money.
What you need is a good understanding of the processes that the card companies go through, which will allow you to know exactly when it is best to approach them and what you need to say. By understanding how they treat bad debts and when they are likely to charge it off from their balance sheets, you can take maximum advantage and get the biggest possible discount on your debt. If you get this process right, you will typically be able to write off between half and 80% of your credit card debts. Without this understanding you are unlikely to ever achieve this level of saving.
You can get detailed help and guidance without paying expensive lawyers of debt settlement companies, and if you get the process right, you can even end up getting a better deal than most of the professionals would. Debt settlement fees tend to be about 20% of the debt, so by doing your own negotiation on a credit card debt of $20,000 will save you about $4,000 in fees.
Read advice on how to negotiate debt.
This is when people sometimes jump at the first solution they can think of, which in some cases can often make things worse. Debt consolidation loans, for example, are often used by people to pay off credit cards, but all that happens is that the problem is transferred to another lender, often leading to greater interest payments in the long run. Others consider bankruptcy, which is indeed a serious step and should not be entered into lightly. Bankruptcy will rarely be an appropriate response to credit card debt.
Negotiating a settlement with the card companies or collection agencies is always the best answer to credit card debt. The idea being, to get an agreement to write off as much of the debt as possible to begin with, leaving only a fraction of the debt to pay. It doesn’t matter if you don’t have money to pay off a lump sum, there are ways around that. The main thing is to get your negotiation right and get rid of the vast majority of your debt in one go.
Of course, doing this is easier said than done. Card companies and collection agencies are not always the easiest people to negotiate with, and you will often be met with an unwillingness to co-operate. In this situation many people turn to lawyers and professional debt settlement companies to help, but these people all charge significant fees for their help. There are other sources of advice, and with the right guidance you can manage perfectly well the debt settlement professionals and save an awful lot of money.
What you need is a good understanding of the processes that the card companies go through, which will allow you to know exactly when it is best to approach them and what you need to say. By understanding how they treat bad debts and when they are likely to charge it off from their balance sheets, you can take maximum advantage and get the biggest possible discount on your debt. If you get this process right, you will typically be able to write off between half and 80% of your credit card debts. Without this understanding you are unlikely to ever achieve this level of saving.
You can get detailed help and guidance without paying expensive lawyers of debt settlement companies, and if you get the process right, you can even end up getting a better deal than most of the professionals would. Debt settlement fees tend to be about 20% of the debt, so by doing your own negotiation on a credit card debt of $20,000 will save you about $4,000 in fees.
Read advice on how to negotiate debt.
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