There are a few options available to someone who is in debt by a large amount. The one right for you will depend on your individual circumstances.
The main options available are a debt consolidation loan, debt consolidation mortgage, debt management, an IVA and bankruptcy.
If you own your own home a debt consolidation loan or debt consolidation mortgage may suit you as the loans will be secured on your property, resulting in a lower interest rate than other types of loans. However your home may be at risk if you fail to keep up with the repayments.
Debt management can be costly and relies on all your creditors coming to an agreement.
Bankruptcy should always be a last resort. Your credit rating will be severely affected and will be advertised in the press.
An IVA (individual voluntary agreement) enables you to spread your repayments over 5 years, after which the reminder of your debt is written off. During the repayment period interest and charges are frozen and the payments normally work out around 0.80 pence in every pound owed.
For further information visit Debt Consolidation.
Debt Consolidation Explained contains general information only. We strongly advise you to seek qualified professional advice before taking any action.