Bankruptcy or Debt Management Plan – What’s Best For You?

July 22, 2010 - PRLog -- Insolvency can be your most horrible nightmare in this world. Bankruptcy is characterized by a condition where everyone endlessly struggles to uphold a standard of living whereby being in debt and therefore financially ruined. The western world faces this difficulty more than the underdeveloped world as the idea and employment of credit is more ordinary in the highly developed western world than in the underdeveloped countries.

Administration of your debt is possibly one of the most complicated tasks, particularly when you have possessions at stake. Owing to the recent economic crisis, loads of countries have launched diverse debt management plans to help the people deal with their debts. IVA is one such debt management plan launched and sustained by the government in UK to facilitate people get rid of their debt at reasonable rates and possibly prevent repossession of their property.

IVA (Individual voluntary plan) is a debt management plan where the creditors agree to resolve the debt with their debtors at reasonably priced charges. The IVA plan commonly involves a cautious estimation of the applicant's financial environment, incomes, and expenditures, and then draws a draft plan for the refund of the debt.

This outline plan is presented to the creditors and ahead of the authorization of this preparation by the creditors in an open meeting the debtor is allowed to pay off the debt at reasonable rates in 60 months. The reasonable payment is determined by balance of the income minus expenditures. The creditors have the right to refuse the plan and if more than 25% of the creditors reject the plan, the IVA is disapproved.

This plan is generally very beneficial for the debtor because in this the debtor gets a chance to repay the debt and save his property from repossession. Creditors might also be attracted by this plan because in many cases they would not be able to recover any amount of debt from the debtor, and in such a case they get the opportunity to recover some amount of the debt and thus they might also approve of this debt management plan.

It is moreover likely to get cutback in interest rates, and the accordingly the overall debt is also condensed thus giving the debtor a chance to repay the debt and regain control over his life. Normally, this management plan is appropriate for people with numerous debts as it will help them get rid of all those debts at level-headed monthly installments.

Other than IVA, there are many other debt management plans such as Debt consolidation loan which is granted to people who generally have multiple debts. This is actually a loan obtained to pay back multiple loans in large installments, and then the debtor has only one creditor to deal with and the repayment of this single loan is then done in reasonable monthly installments.

This may also assist you in dropping interest rates by repaying multiple loans and in this manner merge them into one distinct loan. As there is merely one loan, the interest would only be applied on this loan, and as a result you would have to give lesser amount over all interest.
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Bankruptcy is not the only option if you are struggling financially. Debt settlement is the best alternative to filing bankruptcy. Most consumers are able to eliminate 50% of their unsecured debt while avoiding some of the negative consequences of bankruptcy. If you are on the verge of filing bankruptcy it would be wise to at least look into a debt settlement program.

Check out the following link to speak with a debt relief specialist for a free debt relief consultation. It’s completely free and could save you from filing bankruptcy.
Free Debt Advice
(http://www.FreeDebtReductionHelp.com)
Or Call - 8008940286