IVA and Trust Deed Debt Advice

IVA and Trust Deed Debt

The difference between an IVA and a Trust Deed is minimal, although significant. In Scotland, the debt solution is called a Protected Trust Deed, while the rest of the UK calls it an IVA. The difference is the law.

Both debt solutions enable you to repay a proportion of your debt (what you can afford) and have the rest written off. However, there are subtle differences between an IVA and Trust Deed for instance;

- They are governed by a different legal system
- An IVA lasts usually for a minimum of 5 years (6 if you have property)
- A Trust deed usually lasts for a minimum of 3 years
- If you have equity in your property in an IVA then the solution can last for an extra year
- If you have equity in your property in a Trust Deed then you must remortgage or refinance (possibly even sell) the house
- The minimum amount of unsecured debt to enter a Trust Deed is typically £10,000, whereas it's £12,500 in an IVA
- When you put the proposal to your creditors the system is completely different (1/3rd in value must accept or majority in number of creditors for a Trust Deed, in an IVA its 75% must accept)

The benefits of an IVA and Trust Deed

There are both benefits and negatives of an IVA and Trust Deed. The benefits include;

- Only repay what you can afford each month
- Stop creditors pestering you; the IVA / Trust Deed company will look after that
- The solution is legally binding so if your creditors agree to your IVA / Trust Deed then they can't go back on the agreement

The negatives of an IVA and Trust Deed


- The IVA and Trust Deed will have a negative impact on your credit rating
- If the solution fails you would face Bankruptcy
- Your creditors don't have to accept your proposal so make it as good as possible

Tips on getting credit

Essential Tips on How to Get a Credit Card

Banks and their marketing associates and divisions are vying with one another to capture a thick slice of the "credit card pie." Offers by phone and mail of free credit cards, pre-approved credit cards, cards with special bonanzas, money back schemes, low introductory rates, and umpteen other perks pour in tempting you everyday.

A credit card is just a form of borrowing that does not come free. Credit terms, interest rates, fees and more can lay a stress on your bank balance. Credit cards are a temptation to spend now and pay later. What invariably happens is that people spend more than they can handle.

Informed consumers must always weigh carefully the pros and cons and compare different options before deciding on a credit card.

Before you decide find out

The advantages of a credit card are that it is a safe alternative to cash. Prevents loss as well as theft of cash. Using a card wisely can build a good credit history which helps when you need a loan or subsidy. It is useful in emergencies like accidents, urgent hospitalization, and unavoidable circumstances like natural calamities and so on. It grants a breather and gives you time to pay the bill. Some memberships offer travel or accident insurance to the card owners at no cost. They also offer privileges like discounts at restaurants, shopping malls, and holiday packages.

The other side is that you can get carried away and live beyond your means, ultimately falling into debt.

To be eligible you need:

• To be at least 18 years old.
• Have some income or the backing of credit worthy parents.
• Have an operational bank account.
• A telephone.
• A good credit rating. Your monthly expenses must not equal or exceed your income. Ideal expenses must account for approximately 50% of your income.
• To get a Visa or Master card your income must exceed £12,000 a year. Or, you need to apply for a secured credit card where you pay upfront a certain amount of money as security deposit.

There are many kinds of credit cards to choose from. Unsecured standard and classic cards are those with a credit limit of £2000 and generally charge higher interest rates and offer lower or less favorable terms than the platinum and gold cards. Unsecured platinum and gold cards are for people with high credit ratings, and the limits for these cards are between £2000 to £100,000.

Here are a few links that will give information and opportunities to apply for cards online:

• Visa at www.usa.visa.com/?country=us&ep=v_gg_new provides information, gives tips, and has listed a number of financial institutions that offer Visa cards and a wide range of services. One can apply for a card online.
• MasterCard International at www.mastercard.com/index.html is comprehensive with information, advice, and options of choosing and applying for a card online. They have an online form which when filled will give information of which card would be ideal and a channel which provides instant comparison of various card options.
• CreditCards.com at http://www.creditcards.com/ has articles, FAQs, a site map, and online application channels.

Tips:

• Pick a card because it has the lowest APR.
• Pick a card because all its terms and conditions have been carefully vetted by you. Read the fine print.
• Never pick a card because it is free for a year or life.
• Do not choose a card because it offers a low introductory rate.
• Do not choose a card because it has a cash back policy or great rewards programs.

Choose wisely and live debt free.