The Alternatives to Bankruptcy

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If you – like literally millions of other people today – find yourself in financial trouble, there are a number of options available to you. Amongst these options, if your debts really are insurmountable, is bankruptcy. And sometimes, declaring bankruptcy is the only realistic way out for people whose debts have reached truly hopeless levels.

But if you’re wondering “is bankruptcy right for me?” don’t be persuaded into declaring bankruptcy until you’re sure of all the facts. There are significant disadvantages to bankruptcy, which you must be fully aware of before you even consider it as a possibility.

The main alternatives to bankruptcy are Individual Voluntary Arrangements (IVAs), Debt Management Plans, Administration Orders, and Informal Arrangements.

An IVA is a formal and legally binding arrangement between a debtor and his or her creditors to pay back set amounts over a few years.  These payments are usually monthly amounts that the debtor can afford, and once all the IVA payments are done the court legally protects you against any further creditor hassle. The costs of an IVA are lower than those for a bankruptcy and you should be able to keep all interests you have in property.  There should be no fees to pay upfront and there are no statutory costs to pay.  To look into the possibility of an IVA, you will need the services of a licensed Insolvency Practitioner.  More information on this can be found in our earlier article Debt Information: What is an IVA?

Debt Management Plans are formal arrangements with creditors that are kept private – you don’t go on an official register. The most appealing thing about a debt management plan for many people is that someone else will talk to creditors on your behalf. Your representative will also negotiate one affordable monthly amount to your creditors. These payments will be based on your income, but none of your debts are actually written off. Instead, interest payments are stopped.

An Administration Order is an option if you owe less than £5,000 in total to two or more different creditors and have at least one County Court Judgment against you

Alternatively, you may be able to come to an “informal arrangement” with your creditors to repay what you owe – though it can be difficult to get everyone to agree to such an arrangement, so it’s best to seek expert advice from a reputable company.

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How to Find Legitimate Short-Term Loan Lenders

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In recent years, the economy has come crashing down, millions are out of work, and many people are left wondering how they are going to pay their bills.

To make matters worse, traditional lenders such as banks have become much stricter on who they loan money to, which means if your financial history is less than perfect then you chances are being approved are incredibly slim.

So just what options are available to you?

Well, one avenue that you could explore is one of the many payday loan lenders operating on the internet today.

These “payday” loan companies specialise in lending small amounts of cash to people who are facing financial emergencies. Best of all, they do not run any kind of credit checks, which means you have a high chance of being approved for the loan.

You do need to be careful though, as there are some lenders out there that are not entirely legitimate. In fact, some payday lenders are basically illegal loan sharks, who will often use violence against you if you don’t pay the money back on time.

Luckily, these shady lenders are in the minority, and the vast majority of short-term lenders are legitimate and operate within the financial laws.

Here are a few tips on how to find a legitimate short-term loan lender:

Look for reviews

The internet has really taken off in the last few years, which means it is an excellent place to look for reviews and feedback. If you are considering using a certain lender, then it can be helpful to check the various financial forums and blogs for both positive and negative reviews.

Ask friends and family

A good way to find a legitimate short-term loan lender is to ask your friends and family. There should be at least one person that you know who has obtained a short-term loan before, and they will be able to advise you on who to trust.

Contact their support staff

Any short-term loan lender that is professional and trustworthy will have a team of support staff on hand to help you with any questions you may have. If there is no phone number on the website, then you should avoid applying for a loan with that company.

Read the terms and conditions

Always check the terms and conditions of the loan before applying. A legitimate company will make everything very easy to understand, while a rogue lender will look to trick you and make everything as confusing as possible.

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