Debt Advice TV | Advice on the Solutions Available for Debt Problems HD

http://DebtAdviceTV.com In this video Darran Hughes interviews Sue Clay, licensed Insolvency Practitioner, and discusses what solutions are available to those with debt problems. This debt advice provides an outline of both the informal and formal solutions that exist in the UK. Sue explains that it very much depends upon the extent of the problem, but in all cases some form of self-assessment should be done first. This involves identifying what your regular income levels are and where your money is being spent. This may identify some simple lifestyle changes, or means of reducing bills. Once done, if there is still more going out than is coming in, they could initially speak to their creditors and explain the situation with a view to adjusting payment terms. However as this takes some skill and experience, they still should seek professional debt advice. The next level of informal debt solution is a Debt Management Plan, whereby an industry professional works on your behalf to negotiate on your creditors. One of the limitations of a debt management plan is that being an informal solution, your creditors could decide if they wish to pursue you for money owed at a later date. The payment amount and length of time to repay will vary and subject to creditor agreement. In this case there is no actual debt relief, and you will be expected to repay everything you owe. This is the advantage of more formal debt solutions. They are formal in that they are recognised by the courts and form a legal agreement to which the creditors and the debtor must abide by. One such formal solution is an Individual Voluntary Arrangement or IVA. An IVA can only be administered by a Licensed Insolvency Practitioner. An IVA is limited to a set payment period of typically five or six years, with payments being made at an affordable level; which means that any money still owed after that time is likely to be written off. As a legal contract, creditors are no longer entitled to chase you, and any demands or variations to the arrangements can only be dealt with by the insolvency practitioner supervising the IVA. The next formal solution is Bankruptcy. As this has very far reaching consequences, always seek debt advice from a qualified and licensed debt advisor such as a Licensed Insolvency Practitioner. The bankruptcy process can be very detailed and involves agreement being sought from the courts. In most cases, a bankruptcy order will write off all debt that cannot be recovered by liquidation of available assets. Bankruptcy is therefore only a realistic option for those with very limited ability to make some form repayments in an IVA or Debt Management Plan. Seizure and Liquidation of assets such as your savings, home, car, and valuable personal possession may be required, however the courts recognise that you must be able to live and liquidation will only be required where there is significant value or equity which can be used to settle the original debts. Sue once again str