Debt Solution |
Advantages |
Disadvantages |
IVAs |
- IVAs Write off as much as 60-70% of your debts
- Be clear of debts included in the arrangement after 5 years
- Fees are incorporated into the monthly contributions agreed with your creditors.
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- You cannot get credit for the length of the IVA
- Your credit rating will be affected for another year after the IVA is complete
- Homeowners may have to re-value their homes in the 4th year and release equity to cover debts if the value has increased.
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Debt Management Plan |
- Your monthly repayments will be reduced
- You may be able to freeze interest on your debts
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- Your debts will not be reduced
- You may be paying your debts off for a longer period of time
- Interest may grow if your creditors do not agree to freeze it.
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Consolidation Loan |
- Your monthly repayments will be reduced
- If your debts have very high interest, it may even reduce your overall debt
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- Your debts will run over a longer period of time
- You will have less flexibility to negotiate your repayments again if your circumstances change
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Bankruptcy |
- Your debts will be written off after one year
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- You may be forced to sell assets, such as your home
- News of your bankruptcy will be published openly
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