Understanding Debt Management Solutions

Debt management solutions are a step by step approach taken to solve different debt problems. The debtor has to do some research on companies or firms that engage in debt management before they set up a debt management plan. So, what are the steps that the company will take before a plan is finalized?

First you need to set up a plan with a debt management company. This plan involves the rough idea of how you would like to pay out your debts. Ensure that the company you are dealing with is authorized to do this kind of work. Next, the company will carry out a detailed analysis of your financial transactions. This will be used to determine your current financial status. They will analyze all your assets, your liabilities, your income and your expenditure. This gives them a clear indication of the viable options.

It also gives them a clear picture of how you have been managing your finances and what needs to be done to make it better. After they have fully understood your situation, together, you will come up with a debt management solution that favours your circumstances. This may be in the form of IVA or a trust deed Scotland. It may also be bankruptcy or debt reduction strategies, debt consolidation and debt refinancing. So what determines what debt solution is viable for you?

Circumstances

In some circumstances an IVA may be preferred to a Trust deed Scotland. However, the financial experts or the insolvency practitioner will explain in details why in your circumstances a certain debt solution is preferred to another. However, there are clear cut minimum qualifications to qualify for either an IVA or a trust deed Scotland. For both, you must have been a resident in the state you are applying in for at least one full year prior to the application. Alternatively you should be a citizen of the United Kingdom for at least one year before you make the applications. The debts must have been incurred in United Kingdom for you to qualify for the IVA or trust deed Scotland.

If you have disposable assets and do not have a viable source of regular income, a trust deed Scotland is the best option compared to an IVA. In a trust deed, the trustee disposes off some of the assets and makes the payment to the creditors. On the other hand, the IVA depends on a regular contribution submitted to the insolvency practitioner for payment to creditors. There also debt limits to qualify for an IVA or Trust deed.

Place of residence

To qualify for an IVA you must be a resident in England, Wales and Northern Ireland. If you are in Scotland, trust deeds will be your best debt management solution. If you are not a resident in any of these areas, you can get information on what debt solutions are available online or from a reputable and authorised debt management company within your area. This should not be overlooked when seeking debt management solutions as it may disqualify you for some solutions automatically.

Once in a lifetime opportunity

These debt solutions can only be used once in your live. This means that you need to have established that no other method will be suitable to your situation before you consider an IVA. Disregard of this may put you at a very awkward position in future when you will really be in need of

these debt management solutions. However, this does not mean that you strain yourself because you are afraid to take the risk. If upon evaluation, these are the only viable methods, go for them.

There are major differences between IVAs and trust deeds. In an IVA, the expert involved is called an insolvency practitioner while in a trust deed, it is a trustee or an accountant in bankruptcy in case of protected trust deeds. The process to take out any of these two methods differs slightly although both of them are registered in a public register. Only the parties to the arrangement know about this and therefore, you need not worry about stigmatisation.