When looking to resolve debt problems, there are a number of options available in order to help restore a good financial standing. Two of these options include an IVA (Individual Voluntary Arrangement) and a ‘Debt Management Plan’. There are various differences between them both and each individual should deter what both entail before making a decision on which is best for them. Below we take a look at the main differences between an IVA and Debt Management Plan.
Firstly, there are many people currently on a debt management plan that would be more financially secure if on and IVA. However not every person in debt may qualify for an IVA.
For an IVA the debtor needs to be at least £15,000 in debt to a minimum of three creditors, whereas for debt management a person needs to have £2,000 of unsecured debt with at least two creditors. When the repayments are over the term of the agreement a debt management plan will mean the debtor pays all monies owed in full. With an IVA only a portion of the total debt is paid (up to 75%) depending on each person’s circumstances.
Typical repayments for both do vary, however a rough guideline would be that for a debt management plan, monthly repayments will be about £100 compared to £200 per month with an IVA arrangement.
Another major difference between these two debt management options is the fact that an IVA is a formal and legally binding agreement whereas a debt management program is not. Furthermore, a person’s assets do not factor into debt management, but with an IVA they do. For example, if a person’s debt was £75,000 but the equity in their property is £200,000 then an IVA would not be accepted. With debt management the person does not need to be insolvent to be accepted, in other words their assets can be worth more than the individuals debts.
Posted in Debt.
Tagged with Debt Management, IVA.
By admin
– March 16, 2010
This is a very common worry in this financial crunch time. Many people are behind of their mortgage payment and are worry about whether lender takes away the home. Now a Second mortgage is also a type of secured mortgage loan. The borrower takes the second mortgage against the property. So the lender has all the right to claim his due amount and can even foreclose but there is no need to panic. You should better contact your lender or the back to let them know your problem that you are facing.
The thing is that the second mortgage has less priority compared to the First Mortgage. So if the second mortgage lender wants to foreclosure then he will have to pay off the due amount of the first mortgage with the sell proceeds and after the he will get his due amount. We all know that foreclosure is a lengthy and costly process. So the second mortgage lenders do not always go for foreclosure though they have all the right to go for foreclosure.
If you are behind on your mortgage lender then you can contact your lender and check if he can help you out in some way or the other. Some times the first Mortgage lenders also buy out the second mortgage if the borrower has good relation with his and the lender knows that the borrowers pay on time. In that case you will have to make the second mortgage payments to your First mortgage lender too as he has buy out the second mortgage.
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Posted in Mortgage.
Tagged with Mortgage, Second Mortgage.
By admin
– March 16, 2010
Zero Percent Credit Cards Still a Good Deal
In this time of economic turmoil sometimes the things that must be done are being done. This means we are using whatever we can in order to get through. Credit cards are one of the options that many people are turning to and there is good reason for this. While credit cards can increase our debts with high interest rates they can also be a help if you have the right card.
For anyone who wants or needs to use their credit cards for expenditures it is very important to do a credit card comparison. Credit card companies are feeling the pressure with new regulations. They have also felt the credit crunch pressures since a lot of cards are through banks.
To get more interest back into credit cards there are still those willing to offer zero percent on credit card purchases or balance transfers. The idea is that one will try to obtain the new credit card since it has such a great deal. With this sensible choice the credit cards may very well be earning interest in a few months. There is a vast amount of zero percent cards, which will allow for the right choice to be made.
Posted in Credit.
By admin
– February 20, 2010
Credit Card Debt Settlement
Now a days most of us has a huge amount of debt and do not know how to pay all these credit card debts and other unsecured debts. These debts are easy to get but the interest rates and much higher than secured debts. If you do not try to pay off these debts, the collection agency can harass you and most of us may have even lost the sleep at night. So the best thing that we can do is try to pay off these unsecured debts.
You can go for a debt settlement with your creditor. Debt settlement means that the debtor and creditor agree on a reduced amount as the payment in full. If your creditor agrees for the debt settlement then you can avoid the harassment of the collection agency. There are many debt settlement companies in the market. You can choose a reputable debt settlement company for the debt relief.
The company will charge a certain amount of fee for making the debt settlement on behalf of you with your creditor. You may try to debt settlement yourself but there is no harm to choose a reputable debt settlement company and paying a little amount as their fees to get out of the debts. You can even choose credit card debt consolidation. So if you are in huge amount of debt, then contact a financial adviser who can help you in the right direction.
Posted in Debt.
Tagged with Debt, Debt Settlement.
By admin
– February 19, 2010
Why Do Credit Card Companies Sue Consumers?
Credit Card Companies sue consumers to get the money owed to them. When apply for a credit card with a credit card company, you sign an agreement with them. In this agreement, you say that you will pay any money that the credit card pays on your behalf.
If you stop making your payments, the credit card company sees this as a breach of contract. They can and do sue consumers all the time to try to get what is owed to them. They will need to show evidence that you opened an account with them, that you agreed to their contract, and that you are in default with your payments (i.e. you have not been making your payments).
To show that you opened an account with them, the credit card company will need to show a physical or digital application that you filled out. Sometimes, a credit card company change the terms of the contract after opening it. In this case, you may find some leeway in court. Finally, the credit card company will need proof that you have not been making all of your required payments to them.
Statute of limitations for debt collection does exist. This can prevent a credit card company or collection agency from trying to sue you for breach of contract. In many places, this is seven years but it depends on country and state law. In the UK, the statute of limitations for debt collection is six years. Therefore, if a credit card company has not contacted you for the last six years about debt you owe them, they cannot start trying to collect now. Absolutely no contact has to have existed between you and the credit card company or collection agency (fat chance there) for six years for this to pan out.
If the credit card company is suing you, it is still not too late for you to try to work out your debt with them. You might have a chance if you can show them that you are dealing with hardships that are making it difficult for you to make your payments right now. If you convince them that you intend to pay off what you owe them eventually, they may work with you.
Although credit card debt is unsecured, if the credit card company wins their case in court, you could be in trouble. You may see garnished wages or a lien against other property that you own. Therefore, it is in your best interests to work out your debt before your credit card company sues you.
If you get in a situation where your credit card companies are suing you, you may be eligible to file for bankruptcy. Filing for a Chapter 13 bankruptcy will let you redistribute your debt obligations. You still owe everybody what you owe, however. If you qualify for a Chapter 7 bankruptcy, you will not have to pay all debtors what you owe them. Certain debts are exempt from bankruptcy claims such as student debt and child support.
Posted in Credit.
Tagged with Credit Cards.
By admin
– February 2, 2010
A Primer on Reverse Mortgages
Many banks and private mortgage lenders like Quicken Loans have increasingly seen reverse mortgages grow in popularity amongst American mortgage consumers. With a reverse mortgage, the lender makes payments to the borrower instead of the other way around. The owner of the property does not have to pay the loan back until either he or she either sells the house, or passes away, at which point the principal and accumulated interest would be subtracted away from the proceeds of the sale. Any funds left over after the reverse mortgage is paid off belongs to the borrower if alive or their beneficiaries if deceased.
Lenders look at three primary factors in assessing how much money a borrower can borrow under their agreement. These include: the borrowers age, the amount of home equity, and prevailing interest rates.
Homeowners must be at least 62 of age years to qualify. If a reverse mortgage is applied for by joint borrowers, the amount the borrowers are eligible for is based upon the age of the youngest borrower. In regards to equity, borrowers can typically borrow up to 50% of their home’s equity depending on their reverse mortgage lender and specific program. In terms of interest rates, generally the lower current interest rates are at the time the loan is processed, the lesser the cost and the more money a borrower will have access to.
Posted in Mortgage.
Tagged with Reverse Mortgage.
By admin
– January 8, 2010
