Tag Archives: debt

Credit Card Debt – How to make the debt affordable

Credit Card Debt – The Pro’s

Credit Card Debt affects anyone who owns a card, Once you use the Credit card your account obtains a balance you need to payback. A credit card’s ability to spread the expense of a transaction is one of its main benefits. Goods or services may be bought and not paid for immediately. Which can further increase the financial stability of a customer! This is in contrast to a debit card, where the funds must be in the bank account of a person for a transaction to take place.

Credit cards also provide better security for customers than other payment types. If the products or services cost more than £100. Paying on a credit card for that portion of the transaction means it is protected by Section 75 of the Consumer Credit Act. This law specifies that a credit card company shall be jointly responsible with a merchant in the event of a payment issue. Examples of this may be defective goods or failure to produce a service as defined.

Earnings Arrestments

Credit Card Debt – The Cons

Because credit cards are a form of debt, they can pose risks unless effectively managed. If the balance is not fully repaid each month, interest charges shall be levied. Costs of interest can be much higher than other forms of debt such as a mortgage or personal loans. That may mean that repaying the original balance becomes more difficult as interest costs increase over time.

In some scenarios, credit cards are also of limited usefulness, for example, if an individual requires cash. Interest on cash withdrawals is usually charged using a credit card. There may also be a fee payable on using a credit card cash machine.

Some credit cards also charge extra fees for overseas use. A non-sterling transaction fee is common throughout the credit card industry and applies to any payment other than sterling in a currency. Travel credit cards often have lower international usage fees but may have high-interest rates relative to non-travel credit cards.

Credit Card Debt

How do people get in debt with Credit Cards?

How much of your money is yours and how much you are contributing against your debt has a lot to do with how your debt first got there. We accumulate debt for many reasons. Such as paying for unexpected crises or unemployment. But most often the debt is a product of poor spending habits. Since spending money is costing you money until you spend cash.

Struggling to pay back your debt? We can help!

IF you are struggling to pay back debts to any creditors FindaDebtExpert can help! With our IVA debt solutions, we can help you pay you debts back at an affordable rate. Whilst in an IVA you will be writing a percentage of your debt off. The amount you write off will depend on your situation.

The Pros of an IVA

  • Once your IVA is agreed by all creditors it is officially a legally binding agreement.
  • You’ll come to an agreement with your creditors about what you can afford to pay each month, meaning you have got a single monthly payment – and it may even be a one-off payment.
  • Not only will you be debt-free within 60 days, but an IVA can take as little as 4 weeks to set up.
  • No upfront fees with Milton & Stirling Ltd allows you to save money and you’ll enjoy a faster set-up time.
  • Your monthly payment will always be within your monthly budget.
  • Flexibility. An IVA is a fixed agreement – but if things change out-with your control you can come to a new agreement with Milton & Stirling Ltd and your creditors.
  • Sticking to the terms of an agreement with your creditors means they can never take legal action against you – you’re protected from court proceedings.
  • An IVA is a private agreement between yourself and your creditors meaning there’ll never be publicity in the newspapers or on social media – unlike bankruptcy.
  • Speaking of bankruptcy – an IVA is acceptable in some jobs, whereas with bankruptcy is not.
  • An IVA could safeguard your property.
  • You WON’T be blacklisted forever. Simply complete the arrangement you have in place with your creditors and can borrow money again. With Milton & Stirling Ltd you can count on your credit rating to improve in time.

The Cons of an IVA

  • An IVA WILL affect your credit rating, and usually, for up to a year after the 60-day completion.
  • Your monthly payments need to be at least £80 per month – and you will only qualify if your total unsecured debt is more than £6,000.
  • If you don’t stay on top of your monthly repayments – you could be bankrupted.
  • Your job or career prospects could be at risk as an IVA is a type of insolvency.
  • You may have to remortgage your house – if you’re successful at re-mortgaging you may still have higher interest rates to pay.
  • If your IVA is denied, creditors may backdate interest on your debts.
  • Really high-value assets may have to be downgraded (such as a second home or a luxury car).
  • As an IVA is a form of insolvency it is listed on the Insolvency Service website – which can be accessed by anyone.
  • Not all debts can be included in an IVA, such as fines imposed by the court.

If you think an IVA is for you contact us today on our live chat located on our home page. You can contact us during office hours on 0161 694 2650. (office hours 09:00 – 20:00 Monday – Thursday, 09:00 – 17:00 Fridays) OR Email us to get started – info@findadebtexpert.co.uk

helping hand depicting how a debt management plan can help people

Can you get an IVA during the current national crisis?

Yes! Is the simple answer.

Covid-19 had swept through the UK & resulted in a UK lockdown imposed on 23rd March this year, which resulted to changes & uncertainty around income for many for the foreseeable future.

An Individual Voluntary Arrangement (IVA) can offer various different benefits when struggling with debt, however it is important to receive specific debt advice from a specialist as the IVA can offer consequences should it not be right for you.

What if I have been furloughed by my employer?

Like many you may have received a furlough notification from your employer during the current Covid-19 pandemic & seeing your payslips have furlough pay after the UK government announced the job retention scheme that goes as far back as 1st March this year. You may be getting your normal pay or 80% depending on route employers’ route, if it was the latter this would cause a reduction on your income then in turn would cause financial strain had things been tight already.

Either way we can proceed to assist you with your debts whilst on Furlough, the main thing our advisors would like to see is confirmation from your employer that your job is secure for the end of the lockdown to ensure you are receiving advice with future planning involved. If you enter an IVA, you may be able to look at step payment to ensure your payments are affordable until full pay is resumed.

What if I am Self Employed?

Entering an IVA with Find a Debt Expert will always include specific advice to you & we will always take in your current situation & use future planning to make any plan achievable. If you are lucky enough not to be effected by Covid-19’s current economic downturn & your income is as normal as before then of course it will be easier to have an IVA in place, if you self-employed & have applied for Universal Credit as your income has been effected then it is possible to receive an IVA, we just want to be sure it is a plan to suit.

If you are currently receiving Universal Credit it may be best to have ready as must income history you can for the last three years such as tax returns to show roughly what you would expect your income to return to after the new normal is in place.

We always offer free advice via the telephone at Find a Debt Expert so should you have any questions please get in touch.