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Many people in the UK are experiencing financial problems, especially during the current financial crisis. When this time comes, professional and reliable debt advice is important.

Being in debt can be a daunting experience, but with the right advice and guidance, your debt can soon be a thing of the past. Your financial expert will be able to introduce numerous debt solutions to help you solve your financial problems.

Debt Consolidation Loans

A good debt solution to consider is a debt consolidation loan. These loans are available as unsecured loans, but are more commonly secured loans. A secured debt consolidation loan is beneficial to you in that it usually lowers the interest rate on your loan. Basically, you take out a new loan to pay off your multiple creditors, leaving you with just one loan to pay off monthly. However, you should think carefully before taking out a secured loan as your home is put at risk. Should you fail to make your payments, your home could be repossessed.

Debt Management Plans

If your financial situation is not ideal for a debt consolidation loan, take a debt management plan into consideration. A debt management plan allows you to consolidate all your unsecured debts into one affordable monthly payment without taking out further loans or making more debt. These plans are suitable for individuals with up to £15 000 debt.

A financial expert will negotiate with your creditors in an effort to reduce or freeze your interest or charges on your debts. However, this is not guaranteed.

IVAs

If you find yourself in debt of more than £15 000, an IVA may be the best debt solution for you. An IVA can be considered as the best solution to avoiding the implications of filing for bankruptcy.

Whereas debt management plans are informal arrangements, IVAs are legally binding contracts between you and your creditors. This means that both you and your creditors are legally bound to follow and stick with the terms and conditions of the contract.

An IVA term typically lasts for 60 months, with the remaining debt being written off at the end of this period. An IVA should only be considered in extreme cases, and is a good alternative to bankruptcy. Your financial advisor will be able to recommend the best debt solution for you.