We have helpful finance management advice on debt, loans and credit cards

An Individual Voluntary Agreement, or IVA, is an attractive alternative to bankruptcy but there are a series of qualification criteria for applying to enter an IVA. To qualify for an IVA:

• The debtor’s unsecured debts must equal a minimum £15,000. In certain instances, an IVA may be approved for a sum of less than this, but only with a reduced fee for the account handler.
• IVA proceedings do not include Mortgages, secured loans and Hire Purchase debts.
• IVA proceedings include unsecured loans, credit cards and store cards, catalogues and overdrafts, as well as tax and VAT for the self employed.
• The debtor should not own material assets which could pay off their debt. Material assets such as equity release on a property or trading an expensive car should be considered before an IVA.
• There is no legal minimum number of creditors who need to be owed for an IVA to be approved but generally IVA firms prefer cases with more than one creditor involved as it gives them more opportunities to get the IVA approved.
• Debtors are required to be in employment for an IVA to be approved, except for exceptional circumstances. If the debtor is receiving long term sickness benefits or has a partner in employment to support the IVA application then creditors may accept it.
• A debtor’s IVA application is unlikely to be accepted without the right type of creditors. There are number of aggressive creditors who will refuse an IVA, regardless of the situation.

A debt management plan is an informal agreement between you and your debtors, which is handled by a professional debt management agency. This company calculate the money you can afford to pay so that you repay debts at a rate you can afford, with a single lump sum payment made to the agent who will distribute this money to your creditors. This removes the stress and strain of the debt process.

Below is a series of questions and answers which you may find useful, if you are considering a debt management plan.

Will I have to live on a tight budget during my debt management plan?

To enter into and maintain a plan that will successfully help you out of debt, it is necessary to live within a budget. This budget, however, is discussed with you at the outset of the plan. You are required to submit all information regarding your income and expenditure to your creditors. It is in your interest when negotiating a debt management plan with your creditors to show them that you are prepared to make concessions in order to ensure the success of the plan.

Why do I have to open a new bank account?

If you have a current account with one of your debtors, it is necessary to open a new bank account. Banks use the ‘right to offset’ which uses money from your bank account to pay another debt with the bank. It is therefore in your interests to open another bank account and prevent this.

Can my creditors issue a county court judgement (CCJ)?

A debt management plan is an informal agreement between you and your debtors which means that they can theoretically issue a CCJ despite the arrangement. Professional debt management agencies, however, have years of experience dealing with creditors and often negotiations are successful in avoiding CCJs. If a debtor was to pursue a CCJ the payments you would be legally required to pay would remain very similar to those of the debt management plan, making it an unnecessary venture.

Can I get into a debt management plan if I already have a CCJ?

It is still possible to enter into a debt management plan if you have a CCJ. You will be required to include CCJ payments in your original financial assessment and these payment will be included in your debt management plan and handled by your professional debt management plan company.

A lot of people these days are looking for ways to get out of debt and for most people the first thing that springs to mind when it comes to getting rid of debt, is bankruptcy.  However most people are unaware of what the bankruptcy process involves and it is only when they actually sit down to find out about it that they realise it is not as simple as just filing for bankruptcy and then having no debts anymore.  If that was the case, wouldn’t everyone be doing it?

Thankfully there are ways to get out of debt so that you don’t have to deal with the stress of being unable to pay your bills.  The problem that a lot of people have, however, is that they try to deal with things on their own and don’t ask for help.  For some reason we are brought up to think of money problems as a subject that we shouldn’t discuss.  It is built in that we shouldn’t talk about money so when we do find ourselves in financial trouble, we try to bury our heads in the sand and hope it will go away.  The reality is however, that your money troubles will not disappear if you ignore them.  They will in fact, just get worse and worse so you have to deal with them head on.

There are a number of things that you can do if you are finding it hard to cope with your debts.  The first thing is to talk to someone about your situation.  This could be someone you know or it could be a financial help line.  Talking to someone can help to take a lot of the pressure off – more in fact than, you would probably think.  There are a number of debt management companies that you can contact too who will be only happy to offer help and advice and a way for you to get out of your situation.

If you want to speak to the experts then it would be a good idea to contact a reputable debt management company such as DFH Financial Solutions.  You will be able to talk about your financial situation and if you wish, you can work through a solution together.  One of the most common solutions to debt problems is a debt management plan.  A debt management plan will mean that you can pay one affordable payment each month instead of struggling to meet numerous commitments.  The debt management company will approach your creditors to come up with a payment that is agreeable to both you and the creditor and you will just pay one sum to the debt management company every month.  The debt management company will then distribute these funds among the various creditors as per the debt management plan.

Using a debt management plan is a great way to become debt free.  Although it will probably take you longer to pay off your debts because of the reduced amount, it will mean that you can start to live your life again without being stressed out by debt that you cannot manage.

An IVA, or Individual Voluntary Arrangement, is the term used for a financial solution to your debt worries. With stark money problems affecting people from all walks of life, getting iva information is a practical step to lifting yourself out of a bad situation.

Most people seeking iva information are tired and stressed from dealing with creditors. They do not see a way out and fear the damage of bankruptcy. While you can not get rid of bad debts instantly and without some consequences, with the proper iva information you can set about changing your financial mess, and therefore your life, in a much easier way then you probably thought possible.

Some iva information you definitely need are the eligibility criteria. You need to have £15000 of unsecured debt, owe to a minimum of three creditors, and have an income with money available to put towards such a plan.

Going through a licensed financial adviser, you enter into a binding contract that will keep the creditors from your door, freeze the interest and charges on those debts and even reduce some of the debt in some places, make sure your repayment plan is affordable, and put you in charge of fixing your money worries.

With any iva information, there are some downsides to such a remedy, but these can be outweighed by the positives. When it comes to sorting out a bad financial position, doing anything is better than keeping your head in the sand.

The iva information you receive will tell you that the arrangement usually lasts longer than bankruptcy, anywhere up to five years, and you can not get unsecured credit for the duration of the agreement. It will show up on your credit report, but even here, at least it shows you are doing something about your situation.

Once you’ve gathered the iva information you need, decide if it is right for you and take the next step of speaking to a reputable adviser. Tale the plunge and face your financial reality. It will help you build a financial future different from your past.

Debt is not something peculiar, but is common among many UK residents. Debt can be beneficial in many ways. It enables people to purchase important things that they would otherwise not be able to afford. These include cars, homes, groceries and many other items. Debt can be in the form of credit card, mortgage loans, auto loans, personal loans or even payday loans.

When debts become a huge burden and the holder experiences difficulties in making repayments, then the debt becomes a huge liability. It puts them at risk of violating the terms of the loan repayment, ending up in a default. A default in turn results in a negative credit rating. Debt repayment problems may also result in creditors seeking other methods to recover their money, such as attaching personal assets. This can be very devastating to an indebted person.

There are several solutions available to people faced with problems making their debt repayments. One of the most popular of these is IVA help. Basically, IVA help is a form of debt repayment solution that is available to UK residents. IVA stands for individual voluntary agreement, and is normally proposed and arranged by a finance adviser or institutions that offer them. IVA help was devised by the UK government and was designed to assist people faced with debt from losing everything they own and being unable to meet their basic needs. It was drafted into law and it is therefore a provision of UK law.

In order for a person to qualify for IVA help, they need to attain a certain criteria. A person needs to owe money to more than one creditor. They also need to owe more than 15,000 pounds and be able to pay at least 150 pounds towards their consolidated debt. If this criterion is reached, then a financial adviser or body may draft a suitable IVA help agreement that will put several factors in to considerations. The IVA help will take into consideration the applicant’s income and expenditure, to ensure that they have enough income left each month to meet their daily needs. The agreement will also consider any assets the person has. Once the IVA help agreement is drafted, it has to be acceptable to all creditors and has to be approved by an IP, or insolvency practitioner.

Debt advice is something that can only be appreciated after the debt has been gathered. Until a person owes something to another person or company he or she cannot really understand the burden he or she has chosen to place on his own shoulders. Then it is too late for the most obvious debt advice, which is of course not to gather debt in the first place. As debt advice goes, this piece of wisdom is one of the more useless around.

Debt is a part of the modern world and any advice that doesn’t take that into consideration is fairly unworkable. Few people can wait to marry until they have bought a home outright, for example, and the mortgage is a debt many see as a sign of success. A nice car is another expensive item that people need, and another debt that is arguably the second symbol of success. Practical advice has to include some way to manage debt that is necessary while offering a way for folks to avoid frivolous debt.

A frivolous debt is one that can be dodged by a small modicum of self discipline. Rather than buying everything that is within one’s credit limit, solid debt advice would say to wait and make those purchases of daily items such as clothing and fripperies until they can be made with cash. Keep every day purchases in the checkbook and not on the card. This sort of advice is the type that can actually help a person to stay out of the crushing burden that many modern people are carrying around.

Another bit of debt advice concerns what to do once the burden has been accumulated and a person has suddenly come to the realization that he or she needs help. Then advice can be much more painful even if it is desperately needed. The debt advice that teaches how to climb out of the financial hole so easily dug includes the concepts of reliable payment and careful management and is often hard to hear, but always just what is needed. Debt advice should be what will help a person regain control of his or her life.

Saving money for your first home takes some time and dedication. To get started, establish your new house fund as soon as possible and spend less than you earn to help your first dream house become a reality. Here are a few money techniques for saving for your first home.

Set up a savings account
Establish a house savings account in a high-interest savings account or in a CD to yield even more interest. Then, set up a savings schedule. Create automatic transfers that coordinate with your paydays at work, automatically deducting a fixed amount before you get to spend it.

Save raises and windfalls
As soon as you are awarded a wage increase or earn bonuses at work, dump it into your home savings account to give it a boost. Since this extra money is above and beyond your regular income, it shouldn’t be missed.

Ensure loan affordability
Once you have worked so hard to save for your loan, it feels great once you have finally reached your goal of a down payment. But, your expenses are likely to increase once you have bought a house. Utility bills, taxes and maintenance can all tip your budget, so make sure you don’t extend yourself too much with your loan.

Cut expenses and set a budget
Tally your expenses and figure out what you are able to save monthly. Set a realistic budget for yourself that includes food, gas even entertainment. You may have to cut back on happy hours, movie nights or weekend getaways, but leave some room for fun. If your budget is so strict, it may be incredibly difficult to stick to it. Elect to set a weekly or daily budget for yourself while you cook more at home, carpool and/or cancel your landline to save even more cash.

Pay off debt
Your borrowing power is determined by how much debt you currently bear. So, if you have credit card debt, a personal loan or a steep car loan, you will not be able to borrow as much as if you were debt-free. So, the more you can borrow for your house, the less you need to stretch for that huge down payment.

This was a guest post by GoBankingRates.com, a site that provides daily updates on the latest CD rates, finance information and more.

Unmanaged spending using credit cards are the number one root cause that drives most of people into credit card debt. If you are current in debt and thinking of having a debt free life in near future, you need to start to look into your debt seriously; steering clear of unwanted debt is a great way to manage your finances and relive the stress cause by debt. Here are some debt free steps which you can put in place as your New Year's plan:

1. Change Your Spending Behavior

You cannot become debt-free if you spend more than you earn. It's that simple! Financial stress relief is called "money in the bank" or "positive cash flow". You need to know where you money goes; this can be done by list down your regular and non-regular expenses. Think twice for any item which you plan to buy, ask yourself whether it is a need or an optional item.

2. Have Your Budget Plan

Make a budget plan for yourself and eliminate or at least reduce optional stuff such as entertainment, dinner at restaurant and luxury vacations. Plan your budget according to your financial capability and spend according to your budget. You will be able to achieve your debt free goal if you can plan for a positive cash flow, which means that you spend less that what your earn.

3. Pay Your Bills On Time, Every Time

Managing monthly bills is an essential part of staying debt free and maintaining a good credit rating. If you find this difficult, come up with a system to ensure that bills are not paid late. For your current credit card debt, you may get help from finance experts such as credit counseling or debt consolidation services; they are widely experience in help people in debt management.

4. Set Your Financial Goals For Long-Term and Short-Term

To change your spending behavior may be difficult, but if you set your financial goals, both for short- and long-term, it is easy to make the necessary spending cuts to get what you really want. So set your realistic financial goals for year 2007 and a few year down the road; and manage, control and cut unnecessary expenses so that your can achieve your financial goals.

5. Plan For Adequate Emergency Savings Fund

You never know what will happen tomorrow, there may be some emergencies which will need a lump sum of money instantly, such as medical bill due to major illness and accidents; money to cover to income shortages such as temporary loss of job. Three to six months' worth of bare-bones living expenses should shield you from most of these problems. Make the savings your habit.

6. Learn to Invest Your Money

Investing can make our money earn more money and keep you out of debt. Learn to invest with your money to grow it. There are many investment plans available in the market, range from insurance, to mutual fund, to stock market. Investment can make your grow your money; in contrary, it may cause you loss your money as well. Normally high gain investment will have higher risk than low profit investment. You need to understand your own risk profile and select the investment schema that meet your risk profile. You can start your learning by taking a class, find a referral to a great adviser or just start reading. Do it your way, but do it; and start now!

So, these are some tips for Your Debt Free Plan. Wish you have a Happy and "Debt Free" New Year.

Most likely you are reading this article because you typed “free debt consolidation” in your browser window. You certainly had a lot of hits on that one and this is just one article of many. One of the things you will have noticed if you start reading articles that seem to be about this concept that there is really a lot of differing information in them. One main reason for this is the fact that there is a lot of ambiguity surrounding the term “free”. You may find an article that talks about free debt consolidation and they really mean there is no fee for the service. You may find another where the concept of free really only refers to the free material you can receive to learn more about debt consolidation.

So here we will discuss both of these concepts.

Free debt consolidation would appear to mean that you can have your debt consolidated into one single loan and you will not have to pay anything for this service. If you are someone who believes there is no such thing as a free lunch, you will probably be skeptical about this and assume there must be hidden fees involved, or they are just lying. Well, the truth lies somewhere in the middle. There are companies, which are true non profit companies that will help you to look at all of your debt and plan the best way to pay down the debt and also advise you on a budget and keeping within it. This is not the same as a debt consolidation company that will take your current bills and pay them down and you pay that company back at a slower rate; these non profit firms are not able to do this and this is not a service that usually comes for free, I’m sorry to report.

If however, you are talking about obtaining a free consultation from a debt consolidation company, you certainly can obtain this service for free. Debt consolidation companies want your business, otherwise they wouldn’t be in business. So they will be happy to have a representative sit down with you or speak to you over the phone about your questions regarding debt consolidation. You can always read about information regarding debt consolidation on the internet, but you may still be confused. As you are looking at the internet, you should make a list of questions to cover every topic that confuses you about debt consolidation. The representative will be happy to spend time with you to answer these questions if there is a chance they are going to get your business. While you are searching on the internet for information about debt consolidation, be sure to visit those sites that give consumer advice about unreputable debt consolidation companies, and also about how to get out of a debt consolidation contract if you do get stuck with one of them. There are even sites that will try to dissuade you from doing a debt consolidation loan. Read about that as well, since you want to know about all sides of the issue. These articles usually discuss companies that use practices that are at best, unethical, and at worst, illegal.

Whether you are online looking for information about “free” debt consolidation or about “free” information about debt consolidation, make sure you know what you are doing before you commit any funds to any organization. Even information that really is free may be totally valueless if the information is wrong. Debt consolidation that purports to be free may not be, and as you originally suspected, has hidden fees that may make your financial situation worse.

That is a reason that many debt counselors advise against using so called free debt consolidation services. You may be better off in the long run working with a company that has clearly stated written fees for their services. You know upfront what you are paying for, and you won’t get stuck with hidden fees that add even further to your debt. When the charges are listed clearly, you can calculate them and know for sure that consolidating your debt is going to cost “x” %. With hidden charges that free debt consolidation companies tack on, you may be paying a much higher rate in the long run and not even know it.

A DMP alone is not credit counseling, and DMPs are not for everyone. Consider signing on for one of these plans only after a certified credit counselor has spent time thoroughly reviewing your financial situation, and has offered you customized advice on managing your money. Even if a DMP is appropriate for you, a reputable credit counseling organization still will help you create a budget and teach you money management skills.

How a DMP Works
You deposit money each month with the credit counseling organization. The organization uses your deposits to pay your unsecured debts, like credit card bills, student loans, and medical bills, according to a payment schedule the counselor develops with you and your creditors. Your creditors may agree to lower your interest rates and waive certain fees, but check with all your creditors to be sure that they offer the concessions that a credit counseling organization describes to you. A successful DMP requires you to make regular, timely payments, and could take 48 months or longer to complete. Ask the credit counselor to estimate how long it will take for you to complete the plan. You also may have to agree not to apply for or use any additional credit while youre participating in the plan.

Is a DMP Right For You?
In addition to the questions already listed, here are some other important ones to ask if youre considering enrolling in a DMP.

Is a DMP the only option you can give me? Will you provide me with on-going budgeting advice, regardless of whether I enroll in a DMP? If an organization offers only DMPs, find another credit counseling organization that also will help you create a budget and teach you money management skills.

How does your DMP work? How will you make sure that all my creditors will be paid by the applicable due dates and in the correct billing cycle? If a DMP is appropriate, sign up for one that allows all your creditors to be paid before your payment due dates and within the correct billing cycle.

How is the amount of my payment determined? What if the amount is more than I can afford? Dont sign up for a DMP if you cant afford the monthly payment.

How often can I get status reports on my accounts? Can I get access to my accounts online or by phone? Make sure that the organization you sign up with is willing to provide regular, detailed statements about your account.

Can you get my creditors to lower or eliminate interest and finance charges, or waive late fees? If yes, contact your creditors to verify this, and ask them how long you have to be on the plan before the benefits kick in.

What debts arent included in the DMP? This is important because youll have to pay those bills on your own.

Do I have to make any payments to my creditors before they will accept the proposed payment plan? Some creditors require a payment to the credit counselor before accepting you into a DMP. If a credit counselor tells you this is so, call your creditors to verify this information before you send money to the credit counseling agency.

How will enrolling in a DMP affect my credit? Beware of any organization that tells you it can remove accurate negative information from your credit report. Legally, it cant be done. Accurate negative information may stay on your credit report for up to seven years.

Can you get my creditors to re-age my accounts that is, to make my accounts current? If so, how many payments will I have to make before my creditors will do so? Even if your accounts are re-aged, negative information from past delinquencies or late payments will remain on your credit report.

How to Make a DMP Work for You
The following steps will help you benefit from a DMP, and avoid falling further into debt.

Continue to pay your bills until the plan has been approved by your creditors. If you stop making payments before your creditors have accepted you into a plan, youll face late fees, penalties, and negative entries on your credit report.

Contact your creditors and confirm that they have accepted the proposed plan before you send any payments to the credit counseling organization for your DMP.

Make sure the organizations payment schedule allows your debts to be paid before they are due each month. Paying on time will help you avoid late fees and penalties. Call each of your creditors on the first of every month to make sure the agency has paid them on time.

Review monthly statements from your creditors to make sure they have received your payments.

If your debt management plan depends on your creditors agreeing to lower or eliminate interest and finance charges, or waive late fees, make sure these concessions are reflected on your statements.