Financial organisations may be lending less however this has only increased the need for help from financial advisers.
As well as people needing extra help getting financial products, there has been a significant increase in people seeking debt advice.
No matter how bad a debt problem might be there is always a debt solution available, but people should always seek debt advice.
It’s crucial people understand exactly what debt solution they are entering and what consequences there could be.
Debt Management Plan
An informal debt solution which can be changed at any period by either party but does mean the full debt is repaid.
Anyone can setup their own debt management plan by simply negotiating with creditors
Usually the ideal debt level for people entering a debt management plan is around 4-5k so long as they can afford to make payments.
Debt Arrangement Scheme
A debt arrangement scheme is only available to people living in Scotland but it’s basically a formal debt management plan.
Once creditor agrees to the debt arrangement scheme all interest and charges must be frozen until the solution ends.
The full debt will be repaid so people will need to be able to afford monthly repayments for the full period of the solution.
The ideal debt level for this solution would be 4-5k.
An IVA or individual voluntary arrangement as it’s also know is a formal insolvency debt solution which could help write of debt.
People who are able to afford monthly contributions to their debt but couldn’t repay it within a reasonable period of time should consider this.
The monthly contributions are made for 5 years at the end of which any remaining debt is written off.
If some enters and IVA and does come into extra money or assets they will have to pay it into the debt solution.
The ideal debt level for an IVA Is £8k +
Protected Trust Deed
The trust deed Scotland will only last for 3 years however at least 10% of the overall debt must be repaid.
Also the criteria to entering a trust deed is different to an IVA but a debt adviser will be able to help with this.
Only once all other debt solutions have been considered and found the be unsuitable should someone consider entering bankruptcy.
Although bankruptcy last 1 year an official receiver will be appointed to make sure people repay as much of their debt as possible within the period.
If the official receiver believes someone can repay more of the debt they can keep them in bankruptcy indefinitely until it’s fully repaid.
Often called Scottish bankruptcy because it’s only available to people living in Scotland and is very similar to bankruptcy in the rest of the UK.
There are different routes to enter sequestration but which one someone is suitable for will depend on their level of income, debt, assets, etc.
There is a never ending list of financial products available so we won’t spend all our time listing them here, instead well focus on the main products.
It’s essentially just like any other loan, you borrow a certain amount and repay it over an agreed period of time with interest added on.
The biggest difference is the mortgage loan is secured against the property and borrowers are expected to pay a percentage of the property themselves.
After the financial collapse in 2008 there was less organisations lending, making mortgage advisers essential in getting approved.
There are a lot of different types of insurance depending on what they wish to financial protect against risk, such as car, life, health etc.
Knowing where to get the cheapest insurance possible has become easy because of comparison website, although financial advisers can help in other ways.
Before we die it’s important we know exactly where our belongings, assets and money will go, especially if we can leave it to loved one’s.
When you write a will you are writing a legal document which outlines what will happen to your possessions in the event of your death.