Do Debt Management Advisors Bite? – Debt Expert

We are generally apprehensive of the unknown and this is true of contacting debt Management organisations as we don’t know what to expect. When you have made contact with a Debt Management charity you should then be put through to a debt management advisor. The debt advisor will assess your current personal financial situation and they will calculate your monthly affordability to pay your outstanding debts and commitments. (Mortgage, Loans, Store Cards and Credit Cards) Once they have accessed your current situation they will then be able to advise you what to do. They will recommend one of four different types of solutions, in order to provide you with a debt solution:-

1. Restructure your debt
Here you contact your loan providers and ask if you could increase the term of your loans, this will reduce your monthly payments. (just be aware that you will pay more in interest if you extend the term) You could depending on your age increase the term of your mortgage as long as it is paid before you retire or you may switch your mortgage to interest only from a repayment mortgage. This needs a lot of serious consideration as you will be leaving your home without a repayment vehicle to pay off your mortgage when you retire.(before doing any of these always take professional advise)

2. Debt Management Plan
Your debt management advisor will send every company that you owe money to a statement of your monthly income and outgoings. They will provide each of your creditors with a list detailing how they have broken down your payments and how much you can afford to pay each of your creditors monthly. You then repay your creditors back monthly and if your finances improve you will pay them more, in order to clear the outstanding debt you owe them. Your debt advisor will ask each of your creditors to stop charging you any further interest on the money you still owe them. It is dependent on each individual credit as to whether or not they agree to this.

3. Individual Voluntary Arrangement (IVA)
This is a legal agreement that is drawn up with all the companies that you owe money to. Your monthly payments are then agreed through the courts and you pay your IVA practitioner who then pays your creditors as agreed. An IVA is managed by an IVA Practitioner who oversees the whole process. The repayments are based on your affordability and your creditors agreeing to a reduced payment over the next three to five years

4. Bankruptcy
Circumstances might be so bad that your debt advisor may recommend you applying for Bankruptcy or you could wait until one of your creditor’s makes you bankrupt. This solution is normally recommended when your debts are so huge and you have no ability to pay them off. Bankruptcy can last for 12months to 5 years.

Of course there is a fifth option which is to ignore your whole situation and carry on as though nothing is wrong – this is certainly not advisable as this is probably part of the reason why you are in this mess in the first place.

Here are two warnings that you need to know about:

1. What ever you do don’t be tempted to abandon your property. Your mortgage lender can still add interest and charges to your debt until your home is sold. They can pursue you for the money for up to 12 years for their money. Try and sell you home first or seek a solution. Best solution here is pay the mortgage first each month this keeps a roof over your head and then divide what is left between the other creditors you owe money to after you have paid your utility bills and food bills. Make sure you pay them something each month.

2. Beware of Rent-buy-back schemes. This is another option which has appeared recently – Its being touted as the mortgage rescue plan or rent-back schemes and is not regulates at all. Be careful of these schemes as they will buy your home from you to get you out of a problem with your mortgage lender now at a knock down price for an immediate sale. They then offer to rent your home back to you so that you can continue living there. Slowly over a period of time they start to increase your rent in order to get you to move out. Take advice first!

In answer to the question of do Debt management Advisors bite? No they don’t bite but they can help and assist you. However be aware of any debt management company that offer to take on your situation for an upfront fee and a monthly fee in order to help administer your debt management plan. They will bite you as you will pay less to the companies you owe money to and you will end up getting further into debt to get out of debt!

I am advising you to contact a professional advisor from a Debt Management company or the Consumer Credit Counselling Services (CCCS) and talk through your personal circumstances first and take their advice. Don’t bury your head and hope the problem will go away or that you will win the National Lottery, the chances of that happening are 17,000 to 1.

Management Advisor – Know Your Client

The contribution of the external advisors in supporting companies (on business or organizational issues) is open to a continuous dispute. As a professional in that area I would like to contribute to that discussion with the following argument; advisors need to know more about their client.

In the financial world the external advisor is kept to an increasing set of guidelines. Since the problems on the stock-exchange in the beginning of this new century, financial authorities have set out new rules for banks and commissioners and other agents that advise private clients on financial matters. The most important rule is the introduction of client profiles. Such a profile communicates the risk-attitude of the client in the investment process. In this way both the client and the bank (advisor) are aware of the risk that is acceptable. This is a strong management guideline.

Both the bank advisor and the business advisor have a stake in the advice. Banks are said to issue too much BUY advices, whereas business advisors too much dwell on the advice to change things in the business. A change in business is like a financial BUY; it will cost money and the advisor will profit from it.

“Clients are not interested that you tell them not to buy,” is what you hear financial advisors say. It is true. Buying gives hope and expectations. You are in the game and you get excited.

Another argument is that financial advisors should invest for themselves. If not, “how can they be ever good advisors?” This is another argument but there is only a small fundament for it. You could equally argue that if this is true you are facing the risk that you enter a pyramid game. You can better trust the advisor if he is neutral (and not involved). This is why there are Chinese walls; the investment side of the bank and the retail side are not connected.

Neutrality is the best position for the business or management advisor too. If you are selling a package and you advise others to buy it they should at least know that the advice is biased.

Where business advisors can increase their professionalism is in knowing the client’s business and organization. The financial advising industry has past this point, as explained previously: they know the risk profile of the client.

Advisors in business still have a way to go in this sense. There are often two camps. There are those advisors that know everything about (the) business. They have specialized on Logistics or Client Relationship Management. Others are perfectly knowledgeable about the organization, about culture or human resources. The first is the “hard” side, the second the more “softer” side.

If you are hiring a specialist than this shouldn’t matter, the specialist can serve in any area in the company. Advisors on the other hand should know or understand “the company.” This is more than a set of specializations. It is about understanding what they add up to. You might imagine that the business owner knows the business well enough. The contribution of the advisor is to explain where business and organization meet in case of a change (when BUY-ing a new instrument).

When it comes to the advise on a new investment the clients’ profile is important. Different companies will require different solutions on a similar problem. What served one company doesn’t necessarily suits another.
Financial advisors know the risk profile of their client. Management advisors should know about this (risk) profile too. And that is more than (knowing) the manager that hired you.

© 2007 Hans Bool

Career Management – Guiding You To The Path You Always Wanted To Go To

Ever got the feeling that you aren’t doing the right work? That you are in the wrong job at the wrong time? Tired of doing something that you aren’t passionate about? Then look for a career management organization that can help ease your career transition and direct you to that dream job you always wanted.

People are changing their jobs every day, pursuing new things and challenges; however bear in mind that a career change can always lead to an unpredictable road and not only does it affect your finances, but it makes you feel like a beginner all over again. The correct next and sometimes final career move is not easy and career management services will help you simplify your life and career objectives.

The first thing that they will guide you in is to make a query about your own personal motives. It is common for people to take the wrong decision, when starting their professional lives, and end up doing something that doesn’t fulfill them. Bear in mind leaving your job to make quick money is not the answer at all and you have to ask yourself the question, that whether you’re blaming your career choice for other frustrations in your life.

The next thing would be to help you outline and focus on your objectives. If you want to be an entrepreneur, you will have to make sure that you are ready to start your own business, and must have a business plan, with career advisors obviously giving you directions and ideas. Remember that it is possible to learn new skills and retrain yourself, but it cannot happen overnight and much training will be required depending on the career you are willing to enter.

While your career management advisor will train you for success, it will also prepare you for failure, because as pointed out earlier, changing career paths can be tricky. Being prepared is the ultimate factor of success so you will be trained on how to start over again. On top of that your advisors will help identify your transferable skills and will help make that plan of yours. They will provide you with a sound designed, personal campaign that will help identify that optimum career path of yours, whether it may be full-time, part-time or active retirement; self-employment too. Thus, get yourself a sound advisor, who will help you attain this goal in life.