It's hard to advise you on limited information.
If you neither have any assets which you could sell to raise enough money to pay the debt (this means houses, expensive cars etc... and not household goods like cds and computers etc...) and can't afford to pay your monthly credit commitments and have enough money to live on then you are insolvent and have the following options.
(i) Consolidate your debt. Take out another loan which will consolidate your existing debt and offer you a monthly payment that you can afford in your monthly expenditure budget. The problem with this option is that depending on how much money you have spare in the month (i.e. total income less total household expenditure)you may struggle to find a loan which will be affordable to you. Also the loan will have interest added to it and you are likely to have to have it over a long period of time (up to c10 years) to make it affordable.
(ii) Arrange a debt management plan. This is an informal agreement with your creditors to pay back as much as you can each month until the debt is paid in full. Interest and charges can be frozen and for smaller debt amounts this can be a good way to pay your debt off without any negative impact on your credit file. The problems with informal plans are that they are not legally binding so your creditors do not have to stick to them or agree them at all. Interest and charges are NOT legally frozen so your debt potentially could even get bigger as you try and make what payments you can. Depending on the size of the debt, the amount of money you can offer, and whether interest and charges are frozen an informal plan can take a large amount of time to pay the debt off in full.
(iii) Propose an IVA. An IVA will allow you to propose an affordable monthly payment to your creditors, usually for 60 months. After this period what remains of your debt will be legally written off. If accepted your IVA will be legally binding on all your creditors and interest and charges will be frozen. The downside is that an IVA will have a negative impact on your credit file and you will not be able to apply for unsecured debt for the duration of your IVA.
(iv) Petition yourself for bankruptcy. In bankruptcy you are likely to be discharged in 12 months and will only have to make payments to your creditors for a maximum of 3 years (and this will only ever be based on amounts that you can afford). Your debts will be written off. The downsides are that this will have a negative impact on your credit file, details of your bankruptcy will be made public and published in your local paper, any large assets such as a house or expensive car etc... may be taken by the court and sold to raise money for your creditors, certain jobs may be impacted by bankruptcy.
Best Regards
Oliver
Thomas Charles and Co Ltd.
Experts in personal debt solutions.
Read customer feedback at:
www.thomascharles.com/about_us.asp
