With more shoppers paying for Christmas on credit, people may enter the New Year to find that they are being pushed further into debt and as a result may struggle to pay their everyday expenses. With this and the credit squeeze taking hold, more people may find it increasingly harder to get credit.
But is there life after debt?
Debt in today's society is a fact of life and can be as stressful and destructive as any drug habit, with the potential to get out of control. This is set to get worse with reports warning of a rise in the number of bankruptcies and house repossessions in 2008. Managing your finances early, either by limiting the amount you spend or arranging a restructured repayment plan can help avoid this situation.
When you are feeling "squeezed" by the debts - that is the time to take advice, and getting the right advice is important.
Debt counselling is unregulated at present and there are a number of companies that offer to help by clearing your debts completely or by making significant reductions, but this may not be the best option for you. Where possible, advice should be sought from either a solicitor who deals in insolvency matters, or alternatively a licensed insolvency practitioner who will be more than happy to discuss the options that are available.
If you have a regular income, or own a property, then bankruptcy can be avoided by entering into an Individual Voluntary Arrangement (IVA) - a proposal to repay debts over an extended period of time. IVA's are mainly used by those people who cannot be made bankrupt for whatever reason due to working circumstances, or they may be a director of a company.
Without substantial assets for instance, it may be in the individual's best interests to be declared bankrupt. With new legislation, individuals are discharged from bankruptcy after 12 months. Be warned; this is not an easy option, as becoming bankrupt will have a detrimental affect on an individual's ability to raise finance in the future or they may be subject to an income payments order that can last up to 3 years.
Whatever the circumstances people find themselves in, there are options available and there is life after debt. The key is to recognise the problem and seek professional advice as soon as possible.
To discuss debt problems in more detail, please contact Sydney Mitchell on 0808 166 8827 or via email to webenquiries@sydneymitchell.co.uk
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