Anyone who watches the adverts on TV or looks at the adverts in newspapers cannot help but notice the amount of Debt Management companies that have sprung up in recent years. These companies tell you that if you have debts of over £15,000 that you can get an Individual Voluntary Arrangement (IVA - or Protected Trust Deed, in Scotland), write off up to 75% of your debt and be debt free within 5 years, which does sound appealing at first glance. However this may not be the best solution for everybody as there can be serious consequences – and getting a secured loan or remortgage by a specialised broker like Newleaf Finance might still be the better option!

If considering an IVA you must consider the disadvantages that are associated with them. Along with the more well know things for example ( information sourced from) www.debtadvicebureau.org.uk

  • It is usually only suitable if the applicant’s unsecured debts exceed £15,000.
  • The IVA’s usually last for 5 years.
  • The assets and home of the applicant can still be at risk if they are not excluded.

There are other cons to an IVA that are less well known for example as posted on www.uk-iva-explained.co.uk:

  • If you fail to keep to the IVA terms, especially by missing payments then you are not protected from bankruptcy.
  • All IVAs are recorded in a public register and could affect your credit rating and chances of borrowing money in the future.
  • If you receive a windfall while in an IVA e.g. win on the lottery then you are required to pay your creditors the money owed.
  • If you work overtime and earn extra income you may have to divide up the money 50:50 between you and your creditors. There will usually be clauses about this in the Individual Voluntary Agreement.
  • Under the terms of the IVA you are required not to obtain credit during the 5 years.

Although looking like an ‘attractive’ option at first but when you fully understand all of the disadvantages detailed above, it may be better to look for another option.

One of these options may be to take out a consolidation loan or to consider remortgaging your home. This would mean that your credit rating is not affected for the next few years and by making your monthly repayment on time could actually improve your credit rating. With a consolidation loan or remortgage from Newleaffinance, you can consolidate all your debts and reduce your monthly outgoings, even if you have CCJs or a poor or bad credit rating.

Contact us today on 0800 281 370 or apply online now, for either, a secured personal loan or remortgage, .