Debt in the News

Star, 'Be realistic about your repayments'

HERE's what an Individual Voluntary Arrangement means...

Star 'Be realistic about you repayments'

• You may only have to pay back a percentage of your debts and only what you can realistically afford - usually around 25% of the total debt.
• Interest and charges remain the same.
• You can pay back monthly or in a lump sum.
• The IVA is legally binding, so creditors can't change their minds.
• You can still have a bank account.
• Unlike becoming bankrupt, it's a private process.
• Your home may be saved.

Advice

How to manage debt...

• Keep on top of repayments - make sure you know how much you have to pay each month and on what day.
• If you are falling behind contact your lender to work out a more realistic repayment plan.
• Don't go to a credit repair agency.
• Lock credit cards away so you can't use them.
• Don't cancel them because you may find it hard to get new cards once you've sorted out your problems.
• Don't apply for new cards - that will make your situation worse.
• You don't have to pay for debt advice, instead got to one of the free firms who can help you sort out your debt.

The Consumer Credit Counselling Service and Citizens' Advice Bureaux can negotiate with lenders and work out a budget to reduce your monthly repayments.

• For Citizens' Advice Bureau - see www.citizensadvice.org.uk
• Consumer Credit Counselling Service: 0800 138 1111 or www.cccs.co.uk
• National Debtline: 08000 122 118 or www.nationaldebtline.co.uk