Finance Money News

There are a number of things that you can put up there, when saying what events in your life could be the most stressful. Should serious financial difficulty be one of them?

So, what should you do to try and avoid these problems? What are the telltale signs of money problems, and what should you do to try and stay away from applying for IVAs/Bankcruptcy?

The main signs of financial problems are:

• falling behind with mortgage payments
• living off your credit card to survive until pay day
• taking credit from people you wouldn't normally ask

Trying to cut back on luxuries would be a primary thing to try and do, so that your necessities each month can be covered and also help towards paying off debts before they get too much out of hand. If this is either too late to do, or you're just stuck on how to go about sorting your money out, then that's when you make a trip to an advice provider (This doesn't have to be a financial advisor in the beginning, it could just be an advice line, or an internet search).

If you need to swallow your pride and go to an insolvency practitioner, you will be seeing a licensed professional who knows what to do to help. Take al ist of your assets with you, and details of your income/expenditure. You will be given a number of different options and their benefits, so that you can make a more informed decision over what avenue you want to go down.

An IVA

This is an arrangement with your creditors, which will give you breathing space, to allow you to get yourself sorted. An example would be to pay a proportion of what you earn into a fund, which, over time, will allow the creditors to be paid more than they were originally owed. Not a bad deal for them, if they just take a back seat for a bit. Setting an IVA up could cost you about £1,500 - sometimes more.

Bankruptcy

This will involve your local county court, and usually lasts for 12 months. Often, you can continue to work during it. Going bankrupt does not automatically mean you are going to lose your home - it will depend largely on the value of your house, the mortgage you still owe, and the general circumstances of your individual case. It also doesn't bring along with it a social stigma. You can survive through the process - it really isn't the end of the world, but ideally, a last resort.

Credit Action have announced that one person every five minutes is declared bankrupt in the UK and have also revealed that at least 104 properties are repossessed every day as the average household debt tops the 9,000 mark.

It’s been thoroughly recommended that people in hardship go and get advice before it’s too late. Many people are missing out on benefits and tax credits which are available to them, often because they are unaware that these benefits exist or apply to them. Debt advice could help you find out what you are entitled to, and budget your finances so that you don’t lose your home too.