Anyone who is or has been deep in debt will admit that there are moments when they close their eyes and dream of someone waving a magic wand to relieve them of their problems and pain.
In the real world, however, that is wishful thinking.
But there are real-life solutions to the problem of debt and a real means of recovery whereby those who fear they will never survive the trauma in which they find themselves are able to do so after all.
It is estimated that half a million people in the UK are beset by very serious debt problems in the form of unsecured loans they are unable to pay. That estimate is believed to be rather conservative, however.
Secured debts are usually sizeable loans made against the market value of a tangible asset – a house or a car, for example, which could be repossessed and re-sold to help clear the loan in the event of the borrower defaulting on repayments.
Unsecured debts tend to be smaller having been run up on credit cards, store cards, bank overdrafts, pay day loans or student loans.
A major problem with unsecured debts is that while, as individual loans, the amounts involved are smaller than in the case of a secured debt, there do tend to be quite a number of them. When those are totalled up, the aggregate is considerable.
And because the creditor has taken a risk by advancing unsecured money, the interest rate charged for that is always higher.
Once a borrower starts to have problems in trying to service those various unsecured debts on a monthly basis, the financial noose around his or her neck tightens quickly. Cue a flood of letters and phone calls demanding payment(s).
Having advanced you money – minus any security from you in the form of assets – in the expectation that you will repay them, fully and on time, lenders start to apply pressure as soon as you fail to deliver.
They see that you are struggling, so they want their money back before you go disappear beneath a tidal wave of debt.
Your inability to repay may stem from factors beyond your control – unemployment, reduced working hours and earnings, sickness, an accident, divorce or bereavement for instance. All such issues are important.
The fact that you are on the Get Help With Debt website suggests you may have a money problem. If so, the question you want answered is how can you hope to write off up to 80% of your debt?
The answer is as follows: experts on the complex laws on lending, banking and borrowing, all the actions relating to each of those areas and the possible repercussions, sit down with you, examine your position in detail, work out what you can – and, equally importantly, cannot – afford to pay and inform your creditors of those realities.
They act with you and for you, providing a buffer between you and your creditors.
Because lenders recognise them as being experts who, crucially, are licensed and regulated by the Financial Control Authority, the personnel behind the Get Help With Debt website are highly respected within the UK’s finance sector.
Your creditors know that what they – as your representatives – will propose is going to be the fairest option and the one best-suited to your particular circumstances.
Ordinarily this will be one of three options – a Debt Management Plan (DMP), an Individual Voluntary Arrangement (IVA) or bankruptcy.
A DMP is an agreement between you and your creditors to pay off ALL of your debts.
This tends to be deployed where the debtor can afford to pay creditors a smaller amount each month over a longer term, or where the debtor will be able to make repayments in a few months, but not at this moment.
An IVA is based on your ability to repay SOME of the debt every month, usually for five years, at the end of which all remaining debt – sometimes up to 80% – is written off.
The IVA is presented to all of your creditors and if the majority of them accept this new repayment proposal, it becomes a legally binding contract between you and them.
The heat is off; in an instant your monthly repayments are reduced dramatically to a level you actually can afford.
After 60 months the IVA will have run its course and any remaining debt is wiped off the slate, leaving you to rebuild your life and move on.
In certain circumstances, bankruptcy is the best option. That, however, is only the case very occasionally.
Check the contact details on the Get Help With Debt site and follow up with a phone call. It could be the best one you’ll ever make.