Debt Breakers - Debt Problems, Financial Difficulty, IVA, Debt Consolidation

By: Debt Breakers  05/12/2011
Keywords: credit card, Creditors, debt consolidation

DebtBreakers will assist you in choosing the most suitable solution to address your financial situation. This will involve looking at your past expenditure patters and detailing your current debts and assets. We will then discuss the most suitable option to address your financial position while allowing sufficient funds for your day to day needs. Depending on your financial situation the following options are available to you.

Scheme of Arrangement / IVA

Known as Individual Voluntary Arrangement (or IVA) in the UK, similar legislation exists in Ireland that allows an individual to seek court protection from their creditors. This will involve the preparation of a financial plan that at least 60% of your creditors (by number and value) must approve. DebtBreakers will prepare the necessary documents and deal with the courts and creditors. Typically under this arrangement you will make fixed monthly payments to creditors over a 3 to 5 year period

Advantages Disadvantages
Avoid bankruptcy Failure to keep up with payments may result in bankruptcy
Avoid publication No longer able to obtain credit during the period of repayment
Interest and late payment charges frozen Possible release of home equity
Often a reduction in debts agreed with creditors You will pay back more than in bankruptcy
Debt free at the end of the repayment period
Professional Status Unaffected e.g. doctors, solicitors or accountants
Creditors can no longer chase payments or take legal action to recover debts

Informal Agreement with Creditors

In many cases creditors will be willing to renegotiate payment terms when presented with a well thought out financial plan. This will allow you to spread repayments over a longer than previously agreed period (usually 3 to 5 years) without the need to go through a court. Typically this could include loans due to credit card companies or the Revenue Commissioners. Many creditors will take a realistic approach to recovering their debts and therefore will be willing to negotiate with a debtor who is open and honest with them and willing to propose a realistic alternative repayment terms. DebtBreakers will prepare the necessary financial plans and negotiate with creditors on your behalf.

Advantages Disadvantages
Avoid bankruptcy and publicity Depends on creditors willingness to cooperate
Continue to obtain credit May require a partial initial lump sum repayment
In some cases interest and late payment charges frozen
Avoid the extra costs of going to court

Loan Consolidation

Loan consolidation typically involves repayment of some or all short term high interest rate debts and replacing these with a single longer term loan with a lower interest rate. In practice credit card, motor and other short term loans are repaid from the proceeds of a house remortgage. This allows you to reduce your monthly outgoings to a more manageable level.

Advantages Disadvantages
Avoid bankruptcy and publicity Full capital and interest must continued to be paid
Continue to obtain credit Possible release of home equity
No approval needed from creditors Total loan repayments will be higher and repayment period extended
Reduced monthly outgoings Possibility of early repayment penalties on existing loans

Keywords: credit card, Creditors, debt consolidation, Individual Voluntary Arrangement, loan consolidation

Contact Debt Breakers

Email - none provided

Print this page