Warning: You should think carefully before securing other debt against your home. Your home may be repossessed if you do not keep up the repayments on your mortgage.

Does this sound familiar

Credit cards out of control	Debt Collectors calling
Loan payments missed	Baliffs trying to contact you
Mail left unopened	Money borrowed from friends and family
Living day to day	Phone calls from creditors
County Court Judgements arriving

If you are in debt and under pressure to meet the monthly repayments, it is tempting to merge all of your outstanding debts into one monthly payment and arrange lower, more affordable repayments. However, you should consider all the implications and various alternatives first:

• Re-negotiate with individual creditors. If approved, your creditors agree to accept lower monthly repayments for a period of time to enable you to ‘get back on your feet’ or until your financial circumstances improve. This is usually a short-term measure. If the creditor does not agree to freeze the interest charges, the debt may continue to grow at a faster rate than you can make repayments. It is likely that the creditor will mark your credit reference file as being in arrears and/or in default which may severely affect your ability to arrange future credit.

• Negotiate a payment holiday. This is only appropriate for one or possibly two months and only if the lender agrees, to allow you to overcome a short-term problem. During the period when no repayments are made, interest is likely to continue to be added to the debt so your repayments may be higher subsequently.

• Take out an unsecured loan. Here you borrow money from a lender to pay off all other loans. Because the loan is unsecured, you do not risk losing your home in the event of a default.

• A further advance. This is loan from your existing mortgage provider, secured against your home, but leaving the original mortgage intact. However, your home is at risk of repossession if you fail to make the repayments in full and on time. Some lenders will lend extra money and charge the same rate of interest as on the mortgage, although many high street lenders ignore this option and will offer you a more expensive personal loan instead.

• A secured loan/second charge mortgage (a loan secured on property). This would be from a different lender than the existing mortgage provider, leaving the first charge mortgage in place. Second charge loans are usually more expensive to repay than mortgages.

• A re-mortgage. Repay your current mortgage and take out another mortgage with a different lender, possibly borrowing more in the process. Here, there is the potential to get a better deal at the same time.

• Transfer various credit balances to a credit card (including the use of credit card cheques to pay off non-credit card debts). This may be an option if you can take advantage of a 0% interest rate and will be able to repay the debts before the initial 0% interest rate expires
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• Individual Voluntary Arrangement (IVA) – Click Here for more details – an IVA is:
• A legally binding way to reduce the amount that you pay back
• A way to stop any further interest charges
• A way to reduce your monthly repayments
• This means more money in your pocket at the end of the month

• Bankruptcy – Click Here for more details. Bankruptcy is one way of dealing with debts you cannot pay. Bankruptcy proceedings:
1. free you from overwhelming debts so you can make a fresh start, subject to some restrictions
2. make sure your assets are shared out fairly among your creditors.
Anyone can go bankrupt, including individual members of a partnership. There are different insolvency procedures for dealing with companies and for partnerships themselves.

Debt Help Options
The various ways to tackle debt repayments problems are set out below, with their relative benefits:

	Consolidation Loan	Debt Management	IVA	Bankruptcy
Protection from all unsecured creditors
In the long run, likely to save money
Avoids selling house to release equity
Unsecured creditors legally obliged to write off the debt
Creditors who don't want to help legally obliged to do so
Arrangement runs for a fixed period
Creditors stop chasing for payment
Avoids the stigma of bankruptcy
Stops affairs being made public in local newspaper
People providing the service have to be licensed

Please use the links below for more information about:

• Individual Voluntary Arrangement
• Bankruptcy
• Debt Consolidation