Changing debt plans

There are a range of solutions available to help people in various situations with their debt problems. Over the years, many thousands of people have been helped out of very difficult circumstances by the right debt solutions.

But what happens if your circumstances change? When you speak with a professional debt adviser, they will help you find the debt solution that is right for you - but if your situation changes, then your debt solution may need to change, too.

What to do if your circumstances change

If you are on a debt solution that no longer meets your needs, it`s important that you get back in touch with the adviser who originally arranged your existing debt solution to assess whether it is still appropriate for you.

Struggling with a debt consolidation loan

If you are currently repaying a debt consolidation loan and you can no longer afford the repayments, you should contact your lender as soon as possible to discuss the situation. You may be able to arrange a temporary reduction in your payments to help you get your finances in order.

If the problem is likely to be longer-term, however, and you have other unsecured debts that you are also struggling to manage, it may be more appropriate to look at another debt solution such as a debt management plan or an IVA (Individual Voluntary Arrangement).

Struggling with a debt management plan

If your circumstances have changed (e.g. your income has fallen), and you find that you can no longer afford your existing debt management plan payments, your debt management provider may suggest a change to your repayments. Your lenders will need to agree with the new terms in the same way as with your original debt management plan.

Alternatively, you might find your debt would take an unreasonable amount of time to pay off in full, in which case your debt management provider might decide that another debt solution, such as an IVA, Debt Relief Order or bankruptcy, would be a better option.

Struggling with an IVA (Individual Voluntary Arrangement)

If you have entered into an IVA and find you can no longer afford your payments, your Insolvency Practitioner might suggest an `IVA variation`, in which the terms of your IVA will be adjusted to suit your new circumstances. Your lenders will have to agree to these new terms in the same way as they agreed the original IVA terms.

Alternatively, if you cannot vary the terms of your IVA or your lenders do not agree to a variation, your IP might suggest that you consider an alternative option, such as an informal debt management plan or bankruptcy. However, the downside to a debt management plan is that it`s an informal plan, so there is no obligation for your lenders to stick to the new terms - unlike an IVA, which is legally binding once it`s in place. Bankruptcy can also have serious consequences, such as the loss of assets or an effect on your employment, so it`s important to understand the personal impact before committing to any alternative debt solution.

If your debt repayment arrangements aren`t working out and you`re wondering what to do, click here for more information or speak to one of our expert debt advisers on 0800 195 2911.

Tags: debt, change, change debt, change debt plan, change debt management plan, cant afford debt plan

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