Yorkshire Debt Solutions
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Don’t Take Out Another Loan.....
......................There Is Another Way!
People who have a poor credit rating may find it hard to obtain loans or credit cards. It is often the case that people with poor credit will attempt to take out one loan after another in an attempt to keep on top of their debts and avoid future poor credit problems.
However, it is this very process that has led to people having poor credit in the first instance. All too often, taking out further loans only eases the pressure in the short term and can in fact lead to further poor credit problems down the line. People believe that by taking another loan to consolidate their debts in to one lower monthly repayment will completely remove the pressure from them and eventually repair their credit. However, this method will usually mean increasing the overall amount of debt, and if the monthly reductions are not sufficient to have a major impact on their outgoings, then these people usually find that they can still not afford to keep up all of their repayments, but now have much larger balances to worry about, this will surely lead to further poor credit problems down the line.
Whilst this is a common problem for people with poor credit, fortunately there is a solution, a solution that will put an end to the problems that these people have experienced.
Debt Management Plans or even an IVA (individual voluntary arrangement) can help ease the pressure that comes with having a poor credit rating. A debt management plan can help you take control of your finances and role these up in to one lower monthly repayment without the need to borrow any more money. It is possible to arrange this yourself, however most people with poor credit may find this difficult as it involves contacting all of the people who you owe money to and can be very time consuming, also individuals may find it difficult to obtain agreement from the lenders to pay reduced amounts.
This is where a good debt management company can help you, by allowing a debt management company to act on your behalf, they will contact all of your loan and credit card providers and explain that you are unable to meet all of your financial commitments. The debt management company will by now have discussed with you, all of your income and outgoings and will know exactly how much you can comfortably afford. This is the amount that they will offer to the loan and credit card companies as a whole. As the debt management company has a wealth of experience of helping people with poor credit, then they are better placed to obtain agreement from your loan and card providers. You should never have to speak to the lenders directly again.
One draw back of debt management is that in some instances, interest and charges are still applied to your debts, this can lead to your balances increasing and can cause future problems with poor credit. You may also be asked to increase your repayments in the future.
An alternative method of dealing with your poor credit issues is the IVA mentioned above. This is a more complex method of dealing with your debts and involves all of your lenders making a formal agreement to accept reductions in court. Once this is agreed, no more interest or charges can be placed against your debts and you can never be asked to increase your repayments as the initial agreement made in court is legally binding. Again you will have a dedicated insolvency practitioner who will deal with all of your providers on your behalf. Click here for more information on IVA's.
A good debt management company or insolvency practitioner will not normally charge you any up front fees to act on your behalf, but some do and therefore be careful before giving them any money. In any case, the companies will eventually be paid, but this will come from your monthly repayments and therefore you should not have to give this money out up front. Always ask if there are any fees involved and be sure to know when these are payable, the last thing you need is to add to your poor credit problems.