Tuesday 12th of January 2010
If you have a number of different unsecured debt commitments to meet then your January payday may not be able to come quick enough for you.
But some of you will go into your unauthorised overdraft in order to stay afloat until then - and if you combine an overdraft with a number of credit cards you rely on then you could see 2010 get off to a poor start, although an individual voluntary arrangement (IVA) could slowly help you get out of the red.
According to Moneynet.co.uk, many of you will struggle to stay out of your overdraft and the website suggests you should ask your bank to extend this limit until your wage slip arrives.
But if your bank no longer allows you to extend your overdraft because you have been in it one too many times - or are permanently in it – then you may want to start asking questions on IVAs to see if this type on repayment plan can assist you.
One of your biggest reasons for going into your overdraft could be because of the need to meet a number of different unsecured debt repayments, such as credit cards and personal loans, leaving you short of cash.
An IVA can merge these financial commitments into one, monthly and more manageable repayment.
Interest can also be frozen, meaning you do not have to contend with constantly climbing rates.
Andrew Hagger, of Moneynet.co.uk, states: "The cost of an authorised overdraft is a mere fraction of the cost of unauthorised borrowing and arranging a temporary increase for a couple of months whilst you get your finances back on track could save you from some crippling bank charges which could turn a minor problem into something more serious."
But if this door has been shut to you for a while, it could be time to think about repaying what you owe through an IVA to prevent your financial problems scaling out of control.
By Chris King
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVA answers may benefit Brits unable to meet the rent
