Christmas is around the corner and many people are wondering how they will cope financially as we continue in the worst cost of living crises for generations.
While everything still seems to be going UP, time still moves on and there are more expenses everywhere we turn.
Although energy price caps are in place and this has recently come down, there are signs it will increase in the new year. Add to this fuel prices have started to rise once again and even as inflation falls, it doesn't seem that way when you get to the till to pay for your shopping.
Interest rates also, whilst being held in September, are likely to rise again before they level off and start to fall. Even when base rates are held (or even fall), bank rates can still increase. Millions will also come off fixed rate deals over the coming months and see a massive increase in monthly payments from what they have been paying. There is little let up in pressure on most peoples monthly finances and things may only get tougher.
Although wages have increased for many people, in the vast majority of cases this is no where near the rate of inflation. This means in real terms; most people are worse off than they were last year.
If you are struggling to meet your monthly payments and afford to live, you should take action as soon as possible.
At X-debt, we deal solely in Individual Voluntary Arrangements
( IVA’s ) which can help you reduce your monthly payments on unsecured debts, while leaving enough to pay for essentials such as food, rent or mortgage and energy bills.
How does an IVA help?
In a nutshell it allows you to pay your creditors what you can afford on a monthly basis after taking in to account essential outgoings.
One essential outgoing would be your mortgage or rent to ensure you and your family have a roof over your head. If you own your own house this ensures it is safe from repossession or bankruptcy. However, you must keep up repayments on a mortgage or secured loan during the term of your IVA.
IVA: Where Do We Start?
An Insolvency Practitioner (IP) would create a proposal to put to your creditors.
The Proposal would outline all Income and Expenditure in order to calculate a reasonable monthly payment towards your unsecured debts. Once the Proposal is accepted by your creditors both they and you are bound by the terms.
As long as the terms of the proposal are adhered to then any balance of debt within the Arrangement will be legally written off when the IVA completes. An IVA would usually run for a period of 5 years. However, in some cases this could change. For example, the debtor may come in to some money such as a windfall like an inheritance. If the debtor can pay the full balance of debt and fees then the IVA could end sooner.
There may be examples where a home owner completes 5 years and the equity in the property has increased somewhat. The creditors may wish to realise some of this equity and insist on a remortgage to pay a further proportion of the debt. In instances where a remortgage isn’t possible, there may be a clause within the IVA which means the Arrangement should be extended by 12 months. This is to take account of this equity that cannot be realised by way of a sale or remortgage.
An IVA is a legal agreement between you and your creditors and once agreed, your Creditors can’t pursue you for any outstanding debt nor can action such as bankruptcy be taken against you as long as the terms of the Arrangement are adhered to.
If You Are Struggling With Debt
If you find yourself struggling to manage, pay your mortgage or rent or even afford the basics such as food and energy it is important to speak to a professional to see what is the best option for you. Whilst some debt plans can affect your credit score and make it difficult to get credit in the future, defaulting on loans and building up arrears can have a worse affect and can end in bankruptcy.
Here at X-debt we hope to deal with your personal debt before it goes too far. Whilst we only deal in IVA's, we won’t pressure you in to that solution and will always try to signpost you to the debt solution which is most appropriate for your situation. Whichever way you go, it is important you are comfortable with your decision and don’t feel pressured. Contact Us
first or try our IVA Calculator
which should give an initial indication of whether an IVA is appropriate for you.