A Guide on Debt Solutions
Creditors can give loans to both individuals and businesses, but the rules and regulations of getting the loan apply to everyone, and a contract is always signed between the parties. Borrowing a loan can be motivated by different reasons for example in the setting of a business, it is possible that the business requires finances to fund their projects because they don’t have enough cash and he wants to attain some cause, therefore, the need to borrow loan from the creditors. Individuals borrow mortgage loan and also loans to start businesses. Sometimes it is possible to find yourself unable to pay the loan given therefore ending into debt crisis because you are unable to pay and this can lead you into a lot of trouble. Loans can be categorized into different types for example that secured and unsecured loans and they all have different payment mode. As an individual or a business, if you find yourself in debt crisis, you can use the following debt solutions.
The Debt management plan is one of the debt solutions you have by signing an agreement between you and the creditor to pay the debts. In debt management plan you sign an agreement between you and the creditor but using third-party that is a licensed company will pay the amount of money is excellent then they contribute and define the money to your different creditors.The the requirement of this solution is that you should make single monthly payments that are to show your commitment to your creditors and also none of your debt is written off. It is important to note that this declaration also is not legally binding and also it is only for the unsecured loans why you have not put any property as collateral.
The other way of solving your debt problem is by administration order that is involving your local court.Like the debt management plan, you give the court some contribution which in turn the divide to your creditors. Debt relief order is the other model of paying your debt, and this one is aimed at the low- income earners. When it comes to the debt relief order, your payment and also your monthly interests is withheld for 12 months without paying the loan and at the end of that time if the situation will not have changed the date is written off.
The Individual voluntary arrangement of the insolvency agreement is a legal binding agreement that combines all your debt in one month and last for 5 to 6 years then the amount is divided among your creditors. Also, you can be declared bankruptcy as the last result.