Debt Management

Posts Tagged ‘BBA’

Many countries around the world have seen a significant rise in the amount of personal debt over the last couple years. For some people, debt is very hard to avoid and also very hard to overcome if the problem gets worse. Debt problems become severe at times and people may not even know that their spouse is deeply in debt. In situations like this you might need to turn to professional advice in order to help you through a rough patch.

The first step to finding debt advice is to admit that you have a problem that needs to be remedied. The second step is to decide whether you can tackle the problem on your own or if you need to seek advice from a third party. After that you need to actually seek out the advice from someone that you trust will point you in the right direction.

There are a lot of people that have no idea just how bad their finances have become. Some people will get in a cycle of paying off small loans and credit card bills with other small loans and credit cards. It doesn’t take long for this cycle to catch up with you. At a certain point your debt will become unmanageable and your creditors will start looking for you. Sometimes it takes people this long (if not longer) to finally realize they have a problem.

Deciding that you need help with your debt problem is not the easiest decision to make. You may have finally acknowledged your problem but you still have to choose to get the help that you so badly need.

There are usually a few different reasons why you might want to avoid getting help with your debt. For example, you may just feel that you can go it alone – without the help of others. You may also be embarrassed by the debt you have accumulated and not want others to know about it. A lot of times husbands and wives will hide debt from their loved ones because they are ashamed or unsure how their partner might take the news.

Some countries have social norms that say a debt problem is a stigma that you should hide from the people around you. Other people feel that debt consolidation companies may try to con them out of money. They also fear that the costs will outweigh the advantages of going with a solution like this.

It’s likely that at some point your debt burden will force you to consider outside advice for your problem. Creditors can be very persistent about the money they are owed so seeking some form of financial advice or counseling can be unavoidable.

When you get to this stage you will have to decide exactly where to turn for guidance. No matter what, make sure the person that is helping you is trustworthy and knowledgeable with their advice.

The first people you should contact is your family. Struggling alone won’t get you anywhere and its possible that your husband, wife, or family could help you at this time. There are also great government resources and counselling services as well as websites that will explain the processes to get your finances back in order.

Learn more about debt calculators – stop by Saralyn Slark’s site where you can find out all about help with debt and what it can do for you.

There will be a new governing code for Individual Voluntary Arrangements starting this year. The UK Insolvency Service has said that the new practices, which have been agree to by the industry, will make the IVA process more clear to the average citizen.

In the past there have been certain dishonest IVA providers that have been criticised for misleading the public. Some consumer groups across the United Kingdom have raised concerns about the new governing code but for the most part they are pleased.

Individual Voluntary Arrangements (or IVAs) are just one of the many debt solutions available to residents of Wales and England. They are a binding legal agreement between two parties: a debtor and a creditor. The agreement will say that the creditor agrees to write off a certain portion of the debt if the debtor agrees to a monthly repayment process. An IVA will last for a period of 5 consecutive years. At this time, IVAs are only available in England and Wales but Scotland has it’s own version known as a Protected Trust Deed.

The IVA process was originally introduced by the UK government to help businesses avoid bankruptcy. But they soon became popular with individuals instead.

There were approximately 45,000 IVAs taken out in 2006 – significantly more than 5,000 in 1998. The popularity of Individual Voluntary Arrangements dropped in 2008 but numbers have increased into 2009-10. The trend appears to be on the rise due to the recession.

When IVAs starting becoming popular around 2005-06, a lot of companies started providing the service but the market was new and regulations weren’t what they are now.

In 2007 and 2008 government regulators had to order several IVA companies to revise advertisements which they felt were misleading to the public. Many consumer rights and debt charities felt the wrong type of people were being told to get IVAs.

A group representing the government’s Insolvency Service, as well as IVA providers, and debt charities put together the new code of conduct.

Pat McFadden, the person responsible for the Insolvency Service said that, “It will provide greater transparency for creditors and debtors alike.” Many groups across the UK are showing their support for McFadden who went on to say, “today’s protocol is a significant achievement for everyone involved.”

The BBA (or British Bankers Association) also felt that the new regulations would mean greater clarity for the IVA marketplace. They went on to say that UK citizens would have a clearer understanding of all their options going forward.

The Insolvency Service, the Bankers’ Association, and many IVA providers worked together in this agreement, which McFadden hoped would “provide customers with the reassurances they need in order to make the right choice for their financial futures.” Only time will tell if the new practices will solve the IVA mishandling of the past.

The UK Insolvency Service plans to closely monitor IVA companies in the coming year to see how these changes effect their business practice. A representative from the group said that they were hopeful that this would be of the greater good for the UK consumer.

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