January 19, 2011 – The economic front that people have been exposed to in today’s world is almost unmanageable as the cost of living continues to shoot up at a very alarming rate. The recession does not make the situation any easier as it is now becoming harder and harder to make ends meet as the rate of unemployment is also soaring on a day to day basis. This has resulted in a large portion of the UK population turning to borrowing in order to take care of their financial needs. This is one of the major causes of insolvency in the market as people are not able to pay off the money they owe on time creating serious problems as the lenders need to get their money back to continue with business.

All hope is not lost however as there are numerous ways that a person can use for debt management to give them financial security so that they can be able to move on with life without any debts. This goes a long way to assist both the lenders and the borrowers as everyone gets what they want. A lot of research has been done to come up with effective methods that people can use such as:

Debt consolidation loans- this is where one gets one huge loan to take care of all the other existing loans. This is usually very convenient debt management practice as one can now concentrate on paying off one loan provider who usually offers the loan at affordable rates. There are very many institutions that offer these and one can find the one that offers the best rates to reduce the financial burden they have. One however has to have a solid plan on how to repay the loan to ensure that it is done fast without any complications.

IVA- this stands for Individual Voluntary Arrangement where a person signs a contract with the borrowers to have a fixed amount of money they will pay. This is usually the best options to take when things are almost hitting rock bottom and one wants to avoid filing for bankruptcy. Here the person’s assets are protected and the lenders come up with a flexible repayment period that the individual can handle with ease. One is also given a long period of time up to 5 years to pay off their debts. Once the contract is over, the lenders can no longer ask for any money from the individual as they are able to walk scot free without thinking of the debts. This helps to solve the insolvency problem as one can start afresh and avoid debts as much as they can.