Managing your money and IVA debt problems   by Ian Richards

IVA The UK Insolvency Helpline Debt Advice Service can provide free advice on IVA , Bankruptcy and Debt Management.

This article explains how you can make your money work better for you and where to get help if you get into difficulty.

The most common cause of debt is people over-committing on credit. People often fall into debt through no fault of their own as a result of things like redundancy, relationship breakdown or illness. Unawareness of how to manage debt can lead to serious problems such as eviction, repossession of goods and even prison.

Budgeting gives you an accurate picture of your financial position. If you know where your money is going, you can make choices. This can range from changing your spending habits so that you can deal with financial problems to finding ways to save for things that you want to spend money on.

Budgeting is essential for managing bills and debts such as loans and credit card payments. If you delay or miss payments, this may affect your credit rating and can cost you a lot of extra money in additional interest. Your credit rating is looked at if you make an application for a personal loan or bank overdraft.
The biggest benefit of good budgeting is peace of mind as you will know that you are managing your income and outgoings and living within your means.

In order to budget, you need to spend some time noting down your income and your expenditure. When adding up your income, you need to take account of the amount you are paid for any work you do, any benefits and tax credits you are receiving and any other source of income such as money from a relative or a student loan. You then carry out the same exercise with your outgoings – so, everything from food to fares, birthday presents and the costs of going out need to be recorded.

If you are struggling with any of your debts, it is important to ensure you target your priority debts first. It is also best to contact the people you owe money to as quickly as possible as this often helps with agreeing a way to pay off the debt that you can afford. They may be able to set up an agreement where you can spread your payments over a longer period of time whilst you get your finances sorted out.

When you contact people to whom you owe money, make sure you are organised by preparing your budget and a list of everything that you earn and owe. Sending this information to a company may help them to understand and be more sympathetic to helping you find a way to pay. Once you have established which are priority and non-priority debts, you can identify.

If you want to borrow money to pay off existing debts, be sure to obtain professional advice as you may end up worse off. You need to check the terms of any loan (interest rate and length of time to repay loan) and make sure you can afford to pay it back.
If you are on a low income, you may be entitled to additional benefits or tax credits. The government’s Directgov website provides extensive information on the range of different benefits available.
If you are not able to control your debts, seek help and try not to panic. You are not alone and advice is available.

About the Author

IVA The UK Insolvency Helpline Debt Advice Service can provide free advice on IVA , Bankruptcy and Debt Management.