Secured loan debt
Many people take out a secured loan when making a high-value purchase – like an extension to a house, or a car. These loans are often available with low-interest rates, making them a viable method for quickly raising funds at an affordable cost. However, borrowing money this way does put your own assets at risk of repossession if you can’t fulfil the repayments. Any action taken by creditors can also damage your credit score.
If you have multiple forms of debt, secured loans should be your priority for repayment. Good communication with your lender can prevent costs from being added on, and, in some cases, they may even grant you a repayment extension. If the lender is aggressively pursuing their money though, our team can provide information on what to do next
Should I consider remortgaging to consolidate my debts?
When implemented wisely, remortgaging can significantly reduce the monthly repayments required to repay your debts. In some cases, you’ll be financially stronger in the long-term as interest payments on remortgages are typically less than those charged on unsecured loans and credit agreements. On the other hand, remortgaging does mean you’re likely to pay over a longer period of time. Depending on the agreement, this may result in higher overall payments due to interest. Furthermore, when you agree to a remortgage, your property is pledged as security to the mortgagee. If you fail to pay the mortgage repayments your house could be at risk of being repossessed.
Mortgages are long-term loans secured against a property. If you end up missing mortgage repayments, your lender will soon be in touch to ask why. Whatever the reason, it’s important to be responsive to their phone calls, letters or emails.
If you’re threatened with repossession or court action, act quickly by getting in touch with our advisers. At this point in the process, assistance and support is vital.
Credit card debt
All it takes is a few missed payments or going over your spending limit, and you could find yourself with large credit card debt. Whilst credit cards are a form of unsecured loan (meaning you can’t have your assets repossessed), failing to repay can still have a negative impact on your credit score.
In order to keep on top of your credit card debt, consider setting up a standing order every month so you don’t miss repayment dates, and take advantage of comparison sites to find cards with lower interest rates.
If you find that your debts have reached the stage that all you can afford is the minimum monthly payments, meaning that your debts are not reducing, talk to Bennett Jones and we’ll be able to help you take the next steps.
Bennett Jones’ role in your financial recovery
Bennett Jones can investigate what you’re spending, both personally and if you are self-employed in your business, and help you understand whether an Individual Voluntary Arrangement (IVA) is the solution you need. Whether you need an IVA, an alternative debt solution, or simply information to help you organise your spending, we can deliver some peace of mind.
Bennett Jones has helped thousands of people solve their debt problems. We understand how stressful and difficult life is when you can’t pay your debts and your bills.
You can trust Bennett Jones to help you if you are struggling to pay your debts. We specialise in Individual Voluntary Arrangements – a legal solution that allows for unaffordable debts to be written off. With an IVA from our team, you will make affordable repayments to your creditors over a fixed period, with the remaining debt written off at the end.