Ways On Being Debt Free

Being debt free is a goal every individual wants to achieve. There are many debt solutions you can choose from but the problem is how you would know which the right one is. You can decide what type of debt solution you want to get, but you will always have the option to seek advice.
There are two basic debt solutions that companies can offer you. It is important to have a little knowledge on each of the solutions so when you sit with a credit counselor you will have an idea of what they have to offer.
The first option is debt management plan. This is a debt solution which allows you make a negotiated agreement between you and your creditors so you can make lowered monthly payments. This method is intended debt relief over a shorter period of time form any debt problems or monthly payments.
The advantages of debt management plan are:
• Charges and interest on your debts may be frozen
• The company will be the one speaking with the creditors
Disadvantages are:
• It is not legally binding since it is an informal agreement
• Longer time in paying off your debts
• Credit score may suffer
• It can only take care of small amount of debt
Another option is an IVA or individual voluntary arrangement which is a form of personal debt solution. This plan involves a formal agreement between you and your creditors to make a month payment and usually takes about 5 years to pay. Before considering this option, it is very important to seek professional help since it is legally binding and if you fail to make a monthly payment, the creditors can petition for bankruptcy.
Advantages of IVA are:
• The charges and interest of your debts will be frozen for the time of your IVA
• You don’t have to pay the full amount you owe, only the amount you can pay within the given period
• Legally binding for 5 years
• Failure to pay agreed payment may lead to bankruptcy
Asking help from a reliable agency and with proper guidance can make you completely debt free in a shorter period of time.

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