Money Debt and Credit

Money Debt and Credit

July 29, 2011 03:00 ET

Don't Dice With Debt-Act Fast for a Fresh Start

WATFORD, UNITED KINGDOM--(Marketwire - July 29, 2011) - In recent weeks there has been some relief for borrowers, as several big-name lenders launched credit cards with long-term zero per cent interest periods. This market change is a great indication that more attractive borrowing options are becoming available. Switching balances to low-interest credit cards can offer relief to those looking to reduce the cost of their debts; however, low-cost borrowing like this is unlikely to be available to many of the thousands of people who are currently struggling with more serious debt problems here in the UK.

With this in mind, debt solutions provider Money Debt and Credit is urging individuals to seek debt solutions that are suitable to their circumstances before it is too late. There were 12,539 bankruptcies in the first three months of 2011, with the individuals concerned likely to experience severely-restricted access to credit for years to come. However, it is possible that if they had explored the debt solutions available to them earlier, this outcome could have been avoided by many.

Before heading down the difficult route of bankruptcy, borrowers who are experiencing debt problems may instead wish to consider options such as debt consolidation, undertaking an IVA, or making a full and final offer to their creditors. The criteria for this range of debt solutions makes them suitable for individuals in different circumstances.

For individuals who owe money to several lenders, it is often helpful to consolidate debts into one secured loan. This can allow them to manage their debts more easily and avoid potential penalties for missed payments. In many cases, it also allows people to lower the sum they are paying out each month for debts, although this may mean they service their debts for a longer period of time.

There were 10,835 IVAs declared in the first three months of 2011, indicating they are seen by many as a real alternative to bankruptcy. A legally-binding agreement, an IVA allows those with unsecured debts of over £15,000 to write off up to 60 or 70 per cent of their debt if they have two creditors or more. As part of the agreement, the debtor will pay back their creditors an agreed monthly sum, allowing them to start their finances afresh after a fixed period of five years.

Finally, making a full and final offer is another debt solution that allows individuals to pay off an agreed amount or percentage of their total debt. This process sees some of an individual's debt written off in exchange for a partial payment via lump sum. This can be set up as an individual formal agreement between the individual and their creditors, or as part of an IVA (Individual Voluntary Arrangement).

Shanton Towle at Money Debt and Credit, said: "When debts start to mount and your finances begin to spin out of control, it can be tempting to bury your head in the sand. However, the best possible strategy is to seek advice and find a debt solution to help you start afresh. We would urge anyone who is currently experiencing difficulties with their finances to visit our website at and explore the debt solutions available to them."

Notes to editors:

Money Debt and Credit is a leading provider of financial solutions offering a one-stop service to consumers on a range of products including Debt Management Plans, IVAs, Full and Final Settlements and Secured Loans.

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