Debt Help: One In 10 People Are Struggling As UK Consumer Debt Reaches £1,500 Billion

One In 10 People Struggling To Manage Their Debt

One in 10 people are finding it difficult to manage their debt according to official figures from the Committee of Public Accounts. Even a project from the Department for Business, Innovation and Skills designed to offer face to face advice on debt problems cannot keep up with demand.

So if you are having debt problems, you are one of around 6m people in the UK struggling to keep up with repayments. The important thing is to take action as soon as you can to try and improve your position, and the best way to do that is to speak to an adviser as soon as you can.

If you have more than £15,000 in debt and you are struggling to repay, you may need to consider using an Individual Voluntary Arrangement (IVA) to sort your problems out, and get your creditors off your back.

Pros: It is a formal, legally binding agreement with your creditors to help you repay debts. You will often be able to pay back less than you actually owe. It is handled by an insolvency practitioner, who will negotiate with your creditors. It is not the same as bankruptcy. Lenders, if they have not already done so, will be unlikely to push for County Court Judgements against you once it is in place, as it is a legal agreement, so there is little point. This can save your credit rating, as CCJs will appear for six years. An IVA, once cleared, will put your credit rating back to ‘normal’, so there is no lasting effect.

Cons: You have to keep up with agreed repayments otherwise you could face bankruptcy. Some lenders may not agree to the IVA, and at least 75% of them have to. It will take up to five years to clear debts through an IVA.

Any exclusions: You have to have debts of more than £15,000 to qualify.

Alternatives: You can try to speak to your creditors yourself, but you may get less sympathy or help than they would extend to a professional helping you. You could declare yourself bankrupt for debts of as little as £750, but this has severe ramifications for your financial future.

Further reference: Speak to a debt adviser Related: Latest debt news