Debts can indeed be a traumatising experience for many people.
They can affect the financial life of a person negatively.
If left untackled, they can create a negative impact on the borrower.
What many people do is they start availing more loans to repay the previous or existing ones.
This may seem to be an easy option, however it is not feasible.
What actually happens when you do this is you create a vicious cycle of them by availing more loans.
This does not help in anyway.
You avail funds with the intention of paying back.
But you end up accumulating more loans.
This will not take you anywhere.
Some people also consider opting for bankruptcy.
Usually, the people who consider this are those who have too much sum unpaid.
It is advisable you don't rush into going in for bankruptcy.
This may have life term effects on you.
Your creditworthiness will go for a toss and it will be made public that you have considered bankruptcy.
People usually consider this when they find all the other methods failing.
When a person declares himself or herself bankrupt, what happens is that they make it public the incapability to pay any more debts.
The pressure of paying will be taken away from your shoulders.
Going bankrupt is not an easy decision.
The effects are really bad.
Hence, if you can avoid this, you must do so.
Now, you may wonder how to get over this kind of a problem! The answer to it lies in debt consolidation.
You can consolidate multiple debts with one single loan that carries a lower rate of interest.
This will help resolve the problem easily.
This will help put an end to the harassing calls of the creditors immediately.
If this solution is not working for you, you can find respite in opting for an IVA.
Individual Voluntary Arrangement is ideally suggested as a solution for those with too many unmanageable debts.
This is a better option than bankruptcy.
Read further if you don't know what this is all about.
Basically, it is a legally binding agreement with your lenders that enables you to repay as much of your unsecured debt as a borrower can pay up.
Usually, the time frame given to do this is five years after which the remaining debts will be written off.
An IVA is a government backed, legally approved solution to your debt problems.
It was introduced as a part of the Insolvency Act of 1986.
It is certainly a better option than the rest.