Debt Management


Gary Oxborough is Practice Principal here at Barlow Irvin Financial Services.  This month, Gary talks about a quite serious subject of managing your debts.

For many reasons, often beyond our control, we can easily find ourselves struggling to maintain payments on loans, credit cards and other forms of debt. The last year or so has added to these pressures with lockdown, reduced incomes and everything else that we have all had to deal with.

We have received a few mortgage enquiries over the last few weeks from potential clients who have turned to debt management companies to try and help them out of these issues. Whilst it is important that you deal with any problems that arise with repaying debt as soon as you can by speaking to the lenders, I recommend that you think carefully before entering into a formal debt management plan or IVA (Individual Voluntary Arrangement). These are often promoted as helping you to write off problem debt and whilst that may suit some people, I do worry that the long-term consequences of this are not fully explained.

Mortgage lenders look very unfavourably at debt management plans and IVA’s. Having one of these registered on your credit file can mean that you will potentially be unable to obtain a mortgage from a “mainstream” lender for six years from the date the scheme ends, not when it starts. This can mean that you could struggle to get a mortgage for seven, eight years or maybe even more. You could probably obtain a mortgage from a specialist lender before this time, but it will be at significantly higher interest rates.

There are many free sources of information, such as Citizens Advice or StepChange debt charity. If you find yourself struggling with debt and I would strongly recommend talking to someone from one of these organisations, before you decide to use a debt management company.

My team are always on hand to help with any questions on this or any other related topic. Should you need advice or have any questions, please don’t hesitate to call us on 01204 304 814. 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.

About the author 

The Barlow Irvin Team

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