With the credit crunch in full swing - and everybody feeling the pinch - there are few subjects in today's Britain that mean more to us individually than freeing ourselves from debt. With rising fuel prices, financial institutions like Northern Rock failing and rising numbers of people falling into insolvency it is little wonder that debt can sometimes seem like an insurmountable problem. However, this need not be the case. If there is debt it can be managed and if the problem seems like it is spiralling out of control there are companies out there who can help. Nevertheless, the decision remains an important one and the right choice needs to be made.



Assessing Your Finances

The key question when considering whether to contact a company to help you manage your debt is this: can you manage it yourself? A useful tool when considering this is to write down a budget to assess monthly income and expenditure. By setting it down in black and white you will know exactly what you owe and precisely where you can save money to help repay these sums. There may also be certain benefits available from both the government and creditors, for example tax credits or credit card repayment assistance. It is vitally important that checks are made to make sure that you are obtaining the maximum amount of help possible in order to manage your payments.

Choosing Your Guide

With figures of personal debt running into billions of pounds it is unsurprising that there has been a proliferation of companies offering to solve debt problems. There are, as in any industry, companies who have sought to use the misfortune of others to their advantage. Therefore it is paramount that you choose a company that you are sure is not selling something for something's sake. A good debt management company will offer each individual a number of possible options in order to get them back on track, and will offer their services free of charge. This will ensure that the company is operating ethically and not siphoning valuable pounds which could be going someway to making the mountain of debt that little bit smaller.

Debt Management – The Options

Good debt management companies offer a number of options when considering the amount of debt each individual owes. The most typical are:

Debt Management Plans

Debt Management Plans are exactly that - a plan set out between an individual and their debt management company to repay their debts whilst also reducing the individual's monthly outlay. These are generally for those who owe smaller sums overall compared to those eligible for IVAs.

IVAs

IVAs are Individual Voluntary Arrangements, which is an agreement between the individual, the creditor and the debt management company. These arrangements are suited for those with larger, unmanageable debts of at least £15,000 and are designed to reduce monthly repayments and in some cases write off part of the debt, dependent on the final amount left owing after the agreement period (between 3 and 5 years).

Each of these options is a viable one when considering where to turn with your debt problems. The predicament calls for a calm approach and careful assessment. Overall, the important thing to remember is that you do not have to fight this battle alone - there are a number of avenues out there that can help turn your debt mountain in to the molehill of your dreams.