Credit Conditions And Debt Consolidation Options
on: October 23, 2009, 4:12 am
Author: Melanie Taylor
on the Q3 2009 Credit Conditions Survey from the Bank of England,
Debt Advisers Direct
noted that the ongoing credit crunch was still restricting access
to credit - and therefore to the debt consolidation loans that
could help many people stay in better control of their finances.
Nonetheless, the debt specialists stressed that there were other
debt solutions available, and that borrowers struggling to clear
their debts should talk to an expert adviser and explore their
latest Credit Conditions Survey revealed that UK lenders, on average,
anticipate further reductions in unsecured credit over the final
quarter of 2009," said a spokesperson for Debt Advisers Direct.
for secured credit, they expect 'some increase' in overall credit
availability over the next three months - so they clearly don't
anticipate any changes that would really alter the state of the
market at the moment.
many of the people currently 'juggling' multiple debts, this is
a pity, as it means they can't access the debt consolidation loan
that could simplify their finances and reduce the monthly cost
of servicing their debt.
important, debt consolidation loans can help people make their
payments on time, avoiding the charges, legal problems and damage
to their credit rating that can come with making payments late
(or not at all). This isn't 'just' because a debt consolidation
loan can reduce the actual size of monthly payments. It can also
make those payments far easier to organise and - perhaps more
important - budget for, on a monthly basis."
so, a debt consolidation loan is by no means the only approach
to debt. In many cases, it's not even the most appropriate one
- people whose debts have become truly unmanageable should not
even attempt to consolidate them with a loan, as this would be
unlikely to make enough of a difference to their finances.
who've lost control of their debts should discuss their situation
with a professional debt adviser, who can take them through their
alternatives and make sure they understand the pros and cons of
every potential approach.
some," the Debt Advisers Direct spokesperson continued, "a
debt management plan can be the best way forward. It's an informal
(not legally binding) agreement with their unsecured lenders,
often arranged by a professional debt management company. The
aim is to reduce the individual's monthly repayments to a level
they can afford - once they've taken their essential expenditure
into account - giving them an affordable, realistic way to clear
their unsecured debts without 'eating into' the funds they need
to stay on top of their mortgage/rent, utility bills, food bills,
in some respects but legally binding, an IVA (Individual Voluntary
Arrangement) is a form of insolvency which is often viewed as
preferable to bankruptcy. An IVA also involves lower, affordable
monthly payments, but is only appropriate for people who cannot
afford to repay their debts within a realistic timeframe. If they
can uphold their side of the deal and repay an agreed amount of
their debt, their creditors will actually write off the outstanding
debt once the IVA has come to a successful conclusion."
aren't the only debt solutions available, but the two examples
given here show some of the potential benefits of talking to a
debt adviser and exploring all the available options.
that debt problems invariably get worse, not better, when they're
left unaddressed, there really is no reason for people to keep
on struggling with their debts alone, rather than seeking the
professional debt advice that could reduce the burden of their
debts - and help them put their debts behind them once and for
Contact Details: Melanie Taylor
South Langworthy Road
0845 056 6480