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Financial Difficulties

At some point in your life you may find yourself in financial difficulties which can prove to be both difficult and stressful. In such cases it is important to consider your current situation and then prioritise your expenditures and evaluate where concessions could be made. It may also be worth seeking expert advice, especially if you need to deal with creditors.

It is vital to remain calm and level-headed during your financial difficulties to ensure that you make a well-judged decision. Remember that the ability to carefully evaluate and determine the current cause of your financial situation will ensure you make the right choices in the long run.

When you initially find yourself in financial difficulties you should contact your creditors as soon as possible. Being honest and organised will show creditors that you are taking your debts seriously.

You may find that some assistance is available but in the event of a job loss, the most important thing is to look to gain new employment as soon as possible.

There are certain bills that need to be prioritised, such as food, housing and utilities. You should carefully examine all other expenses and determine their importance. It is also important to look for ways to cut back or eliminate luxury items. If this cannot be achieved then you should look to at least significantly reduce them.

If you are having serious financial difficulties then you could consider one of the options below.

Individual Voluntary Arrangement: an Individual Voluntary Arrangement (IVA) is a contract between you and your creditors. You pay an agreed monthly sum, usually over a period of 5 years.

Protected Trust Deed: a Protected Trust Deed (PTD) is the Scottish equivalent of an IVA.

Bankruptcy: Bankruptcy is a legal process in which your assets can be sold to pay your creditors. Bankruptcy brings certain restrictions so make sure you consider these first.

Debt Management: a debt management plan is an arrangement between yourself and a Debt Management company. They will manage and allocate your debt repayments.

Debt Consolidation: with debt consolidation you take out one over-arching loan to pay off your smaller ones.

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