If you feel as though an IVA is not the right debt solution for you or you do not qualify for an IVA, then you might want to consider your other options. Always seek expert advice. Contact our AllClear Finance IVA advisors on 0800 048 1762 who will be able to talk you through your IVA alternatives.
What are the IVA Alternatives?
1: Debt Management Plans A Debt Management Plan is a debt repayment plan. It is similar to an IVA as it allows you to pay just one low affordable monthly payment to your creditors. However, Debt Management Plans are a more informal process, and will not offer you legal protection from your creditors, it will not write off any amount of your debt and freezing interest and charges on your debts cannot be guaranteed.
But a Debt Management Plan will make your debts much more affordable in the short term. This is a more suitable option for those who do not qualify for an IVA or do not want to commit to a legally binding contract for 5 years.
2: Trust Deeds Perhaps one of the reasons you are looking for an IVA alternative is because you are a Scottish resident and therefore do not qualify for an IVA. Scottish legislation offers an IVA alternative which is known as a Trust Deed. Trust Deeds are similar to an IVA, as they allow you to write off unaffordable debt, offer protection from creditors and a fixed time frame until you are debt free.
3: Bankruptcy Bankruptcy should only ever be considered when all other debt solution options have been exhausted, as it is the most least forgiving debt solution. Declaring yourself bankrupt means that you effectively lose control of your assets, which means that you can lose your property.
Bankruptcy can also affect you in the long term, such as being accepted for credit at a good interest rate and also your career prospects. AllClear Finance advise that you only take professional advice from a licensed Insolvency Practitioner and seek other debt solutions first.
4: Debt Consolidation Loan A debt consolidation loan is most commonly a form of secured lending which allows you to consolidate your existing unsecured debts into one secured payment. Debt consolidation loans can often offer you a lower monthly repayment and a lower rate of interest.
You should always make sure that you can afford the payment to your debt consolidation loan, as if you fail to make the repayments then your home will be at serious risk of repossession.
5: Unsecured Lending If you have a bad credit rating then you might find it impossible to get accepted for an unsecured loan at a sensible interest rate. If you have tried to borrow from the bank or increase your credit limits, you are probably financially stretched. It might be worth considering making your existing debts more affordable with a Debt Management Plan.
If you are not sure what route to take, the AllClear Finance 1 Minute Debt Test could help you see what debt solutions are available to you.