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| Is an IDA right for me?
Your eligibility for an Informal Debt Arrangement cannot be simply determined by answering a few brief questions. You will need to speak to an expert who will conduct a detailed financial Factfind.
However, there are some basic criteria that can be used to see if you are likely to be accepted for an Informal Debt Arrangement.
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1. Do you have unsecured debts of over £5,000?
Unsecured debts include:
- Credit Cards
- Store Cards
Catalogue debts- Personal Loans
- Overdrafts
You may not think that you have £5,000 of unsecured debt. You may have only borrowed £3,000. But if you have not been making your full monthly repayments for even a year, interest and charges will have been added to your debt, which could well have grown to over £5,000 today. It is important that you obtain up-to-date outstanding balances from your creditors.
2. Are you insolvent?
Do not mistake the word insolvent for Bankruptcy. Being Insolvent describes your ability to repay your debt and is not a solution.
Being Insolvent simply means that you cannot afford to repay your debts each month. That is the full contractual payment and NOT the minimum payment. Do not fall into the trap of repaying minimum monthly payments and thinking you can afford your debts, because with the interest and charges applied you could be paying for up to 40 years. Once it is determined that you are insolvent, a Debt Management Plan could become an option for you.
3. Do you have a stable income?
A Debt Management Plan is a debt repayment plan and to make repayments you must have an income. You must therefore be employed.
You would need to commit to paying a fixed but affordable sum each month to your creditors. To agree to this commitment you need a stable income.
Unlike a formal IVA, there is a higher degree of flexibility with regards to your monthly payments.
These simple criteria represent a generalisation and we would need to speak to you to determine whether you are eligible for a Debt Management Plan.
If
you want to hear more about how an Informal Debt Arrangement can work for you, or whether
you would be suitable for an Informal Debt Arrangement, simply call our expert advisors on 0800 520 0315
quote ref 1533, or fill in the
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