Comparison of Various Debt Settlement Solutions

The following tables show helpful comparisons of the various debt settlement solutions to help people decide what the most appropriate course of action should be. In addition Clear Start advisers are can give best advice on selection of the right debt settlement plan.

	= not possible, not advisable.
*	= ok/possible, but not recommended,
**	= recommended,

Total Unsecured Debts. How Serious is the Debt?

Add up the total of all credit card debts, personal loans and store cards, etc.

	Consolidation Loan	Re-mortgage	Debt Management	IVA	Bankruptcy
Up to £1,000	**				*
£1,000 to £15,000	**	*	**		*
Over £15,000	*	**	*	**	*
Over £25,000		**	*	**	*
	Advisable for lower debts if possible. Not available over £25,000	Advisable for higher debts if possible	For lower debts, if consolidation or IVA not possible	Advisable for debts over £15,000	Available for all levels of debt, but not advisable.

Affordable Monthly Payments. How Much Does It Cost?

Work out how much can be paid towards the debt settlement plan each month. Calculate this by taking monthly income (after tax), minus all essential outgoing expenditure.

	Consolidation Loan	Re-mortgage	Debt Management	IVA	Bankruptcy
Less than £100	**	*	*		*
£100 to £300	**	**	**	*	*
over £300	*	**	*	**	*
	Advisable for lower debts if possible	Advisable for higher debts if possible	For lower debts, if consolidation or IVA not possible	Normally requires payments over £300 per month	Available for all levels of debt, but not advisable.

Other Financial Considerations. Further Financial Implications.

Beyond the monthy affordability, there are other implications such as the total amount paid and the period of the solution.

	Consolidation Loan	Re-mortgage	Debt Management	IVA	Bankruptcy
Interest and charges frozen	*	*		**	**
Debts cleared in 5 years	*	*	*	**	3 years
Possible debt reduction			*	**	**
	Can solve solution if applied correctly	Can solve solution if applied correctly	Can take a long time to clear debt	A final solution	A final solution

Protection From Creditors. Stop Chasing For Payments. Prevent Legal Action.

How important is it to prevent creditors from pursuing the individual? For example, has the debtor been threatened with legal action, or are the threatening letters and phone calls becoming too much?

	Consolidation Loan	Re-mortgage	Debt Management	IVA	Bankruptcy
Not a major concern	**	**	**	**	*
A cause for concern	*	*	*	**	*
Must stop ASAP				**	*
	Be careful to pay off all debts	Be careful to pay off all debts	No protection from creditors	Protection enforced by law	Order enforced by law

How Will it Affect my Credit Rating? Can I Borrow Money Afterwards?

When dealing with debt there are often implications on one's credit rating. This can affect one's ability to borrow money in the future, or for example take out a mortgage.

	Consolidation Loan	Re-mortgage	Debt Management	IVA	Bankruptcy
No need to borrow ever	**	**	**	**	*
Nice to be able to borrow	**	**	*	/*
Must be able to borrow	**	**	*	*
Intend to have a mortgage	**	**	*	*
	Little adverse affect	Little adverse affect	Some adverse affect	Some adverse affect	Refused credit afterwards

I am Concerned About How Legitimate the Solution is. Are These Solutions Regulated?

It is important to get the right advice and the right solution. For some, particularly those who are not very familiar with financial services, there is a worry that they are not being given best advice. The following table tries to show how risky each solution is.

	Consolidation Loan	Re-mortgage	Debt Management	IVA	Bankruptcy
Familiar with financial products	**	**	*	**	*
Need good advice	*	*	*	**	*
Very concerned	*	*		**	*
	Some evidence of poor advice	Some evidence of poor advice	Be very careful	Well regulated	Well regulated. Rarely recommended.

Other Personal Concerns. Things I Feel Strongly About.

Often there are concerns that people have which are not purely financial, such as the social stigma of bankruptcy, or the desire to stay in the family home.

	Consolidation Loan	Re-mortgage	Debt Management	IVA	Bankruptcy
Keep my home	**	**	*	**
Keep my car	**	**	*	**
Avoid social stigma	**	**	*	**
Control the outcome	**	**	*	**
Career Aspirations	**	**	**	**
	Controlled solution	Controlled solution	Threat continues of legal action	Controlled solution	Severe consequences

To talk to an advisor to understand what the best solution is for a debt problem call 0800 138 5445, or complete the enquiry form.

To contact an advisor call 0800 138 5445. Alternatively complete an online enquiry form and an advisor will call you back at the time that you specify.