4 Essential Steps to Circumvent Bankruptcy – Free Debt Help

The fear of bankruptcy becomes obvious when a debtor falls behind the repayments. When no debt management plan in UK works out as expected, the debtor needs to declare bankruptcy. It’s the last solution down the road to get rid of your overwhelming debts and is processed under a court order after filing by the debtor.

There can be several different ways in which you can avoid bankruptcy and through which your credit could be saved. Some of which include:

1.      Selling some of your assets: 

There are some situations when people get stuck while paying out their financial liabilities. With no other option left, the best solution possible is to sell out some of your valuable assets to avoid bankruptcy. Assets like vehicles and properties can be built up again in life, but the most important thing for a person should be his career and social well-being in the eyes of peers. So, if possible, collect significant money by selling your assets like car, house, jewelry or anything expensive, which can help in paying out a large sum of debt. 

2.      Seek consumer credit counseling:

It, sometimes, becomes quite hard to get help from people around you. With rising probability of bankruptcy, you can get debt management advice from a certified financial advisor who will guide you and work out solutions to avoid bankruptcy. There are many insolvency practitioners out there who are always available for your assistance and will give you risk-free and less interest-based debt solutions like individual voluntary arrangement. As you enter into an IVA you cannot only secure your credit card reputation but also after a year will be out of bankruptcy threat.  

3.      Get help from family and friends: 

There are many people around you who would always refuse your idea of borrowing money from your family or close friends. But if you think, this is a very helpful idea, rather than being a bankrupt. It’s better to seek help from your family first and then your pals ready to support you in difficult times. However, before asking for help, make a plan of returning that loan and share with them so that they can be satisfied and comfortable in giving you the amount you need. 

4.      Settle with Creditors and Debt collectors: 

Debt settlement is one of the issues which should be avoided, but if you are stuck in situations like bankruptcy, you can go ahead of settling out the debts with the creditors just to be on the safe side and to be not in the list of bankrupt people. Debt consolidation is quite a good option provided you can prove your eligibility for the same; else it could further deteriorate your financial condition.

Wrapping it all, if you plan well before taking loans you will be less likely to fall behind the monthly repayments to the creditors, and hence bankruptcy. However, even after taking all preventive measures, you may reach at the verge of bankruptcy, then the above-mentioned options could save you from the worst coming your way. Even if things keep getting out of control, seek free debt advice UK by reaching out to IVA Experts UK who will help you manage your debts through appropriate solutions. Everything, in the end, can be effectively dealt with, all we need to do is work efficiently and not get panicked. 

IVA Calculator - Poor Credit Score: What Can it Affect?

Debtor, or not, your credit rating is quite important. It is, essentially, the first thing that creditors check to decide whether or not you are a reliable person to give loan to, and how easily you can pay off. You cannot easily borrow money from any potential lender with bad credit score. However, if you have got a good credit rating, the likelihood of getting qualified increases for better debt deal with lower interest rate – or, on your mortgage if you apply for a house. With good credit score, you can easily lend money on your credit cards. It will eventually help you pay off your debts without trouble. Moreover, you can find the best debt management plan calculator UK to clear your loans with affordable monthly payments. 

Credit Score Influencing Potential Lenders’ Decision :

Have you ever applied for a credit report? If yes, then you must know that the first thing a company or lender will do is looking at your credit report. It’s a mandatory process while applying for a credit card, or a loan.

This report holds all important information about you and your financial history, including where you have been living till date, your credit accounts (opened/closed) or if there are any issues with repaying debts on your past record. It also tells if you ever get into a debt settlement or an individual voluntary arrangement in Debt. Poor credit score is a red flag for lenders; so, it should be avoided.

Your credit report contains the warning signs that help lenders to make the decision of lending you money and at what interest rate. It may not help them with to tell you yes or no – instead the credit applications and defaults listed on it may increase the the interest rate on your required credit product or even reject your application.

Creditors always tend to ensure recovery of the money they lend to, and this is why your credit report should look good. It increases your credibility that you can manage your debts and credit products responsibly.     

What Affects Your Credit Reputation?  

You understand that high amounts of debt and late or missed repayments can leave a detrimental impact on your credit score. But there are a lot of other things that can affect your credit reputation – making it good or bad. A few might surprise you and give you a tough time to get back on track.

As you know the importance of your credit score, you should also aware of things that leave a negative impact on it – making it difficult for you to get credit products of your choice at the affordable interest rate.    

·        Default notice(s)

·        Late repayments

·        Bankruptcy

·        Debt solutions

·        Not having credit 

·        Not registered to vote

·        Several credit applications

·        Available credit you have left

·        Partner’s finances

·        Types of credit products

·        Length of credit history

Bottom Line: 

You should maintain a good credit score and think carefully before making any bog financial decision because lenders will ensure that you aren’t a future risk for them because they always want their money back timely.

Well, it is never too late to recover your credit score if you get free legal advice for debt from financial advisors as ours at IVA Experts UK – providing custom debt solutions.