Advice on Financial Problems

Financial problems can incur because of several reasons such as excessive debt, increased expenditure or decreased income. Debt problems can cause depression and anxiety, so it is advisable to seek advice on financial problems to help schedule your monthly expenditure and ease financial problems from your life. If your expenses are more than your earnings, you need to seek expert advice about your financial circumstances.

A major cause of financial difficulty is that people often underestimate their debts and fail to plan properly for their repayment. People usually come to terms with their situation, the so-called ‘light bulb moment’ when it is too late. To avoid such a situation, you should plan your expenses including bills, mortgage or rent, overdraft charges and direct debits. You should only ever borrow money at a level you can afford to repay when taking other expenses such as food, clothing and travel into account.

There are online debt management companies that can give you advice on financial problems on a free of cost, 24x7 basis. They will assess your financial situation and make a recommendation based on this analysis. You may be advised to seek a consolidation loan, a debt management plan, or an IVA (individual voluntary arrangement). Indeed, if your situation is very severe, they may even advise bankruptcy.

Of these possible solutions, only an IVA carries any legal backing. In an IVA, a licensed insolvency practitioner will be appointed to supervise your case and they will be responsible for handling all communication between you and your creditors. You would typically pay a single monthly sum to the IVA company in lieu of your creditors for a specified time, usually five years. After this time any unsecured debt outstanding will be written off.

In an IVA, the insolvency practitioner will draft a proposal on your behalf, which is sent to creditors for approval. As all creditors have their own acceptance criteria, the insolvency practitioner will try to tailor the proposal to improve its chances of acceptance.