Debt Solutions

Administration order

An administration order is one may to deal with your debts however it comes with certain conditions. To qualify for an Administration Order you must have less than £5000 of debt to two or more people and have an unpaid county court judgment ( CCJ ). A CCJ could include unpaid parking charges , fines or other charges.

In essence an Administration order allows you to make one payment to the courts and then they split this between the people you owe money to. If you are able to get an Administration Order then once approved the courts will decide how much you should pay back each month as well as attach a fee for court costs that can be as much as 10% of your total debt.

It is important to keep up your payments and if you do miss a payment and default on your order then the court can revoke  the protection you had and your creditors are able to chase you for all you owe.

If you owe more than £5000 there are other debt solutions available to you. Simply fill in the form above and you can speak with an advisers and see what the best solution is for you and your situation.

Individual Voluntary Arrangement

An Individual Voluntary Arrangement ( IVA ) is a formal arrangement between you and your creditors that means they are no longer allowed to pursue you for your debts. In an IVA an advisor will negotiate with your creditors to see what you can and can’t pay back. When in the arrangement you pay one lower monthly fee for five years and at the end all your remaining debt will be written off and this can be as much as 85% of your debts.

Features of an IVA

  • All interest and charges are frozen on your debts
  • Legally binding meaning your creditors have to stick to the arrangement
  • Creditors are no longer allowed to contact you directly
  • Court actions regarding your debts will be stopped

The requirements of an IVA are that you have over £6000 worth of debt to more than 2 creditors then an IVA is a possibility for you. By speaking to an advisor to check if an IVA is the option for you and if not an advisor will work with you to find the best solution for your situation.

Unlike bankruptcy an IVA will protect your assets so you won’t have to sell off your possessions.  If you choose to seek help then a trained advisor will look into your case and then your Insolvency Practitioner will negotiate with your creditors to come to an arrangement where you pay 1 simpler and smaller monthly payment for the next five years and at the end all the outstanding debts are written off.

An IVA is often for residents in UK the best way to write off debt they cannot afford. However, in an arrangement there are some rules you have to stick to. In the arrangement you must make your monthly contributions and make your advisor aware if you are unable to make payment.  When speaking to an advisor let them know all the details surrounding your debts so they can make sure they find the bests the for you. Whilst in an IVA your credit score will be affected.

If you think that an Individual Voluntary Arrangement could be the right thing for you simply fill out the above form and an adviser will be in touch to discuss your options with you.

Trust deed

A Protected Trust Deed is the Scottish equivalent of an Individual Voluntary Arrangement (IVA). A Trust Deed is a formal, legally-binding agreement that is arranged by an Insolvency Practitioner where you pay your creditors only what you can afford every month for a set period of time, usually 4 years.  The protection offered in a Trust Deed is similar to that of an IVA in that all interest on your debts will be frozen as well as all legal action.

Some of the debts that a Trust Deed can cover are;

  • Credit cards
  • Personal loans
  • Bank overdrafts
  • Council tax debts
  • Store cards

When applying for a Trust Deed, an advisor will go through your income and expenditure with you to find a realistic figure of what you can afford to pay back to your creditors. By looking at your incomings and outgoings, the advisor will be able to take into account your circumstances to agree a figure to take to your creditors. When a figure has been decided upon, an Insolvency Practitioner would then negotiate with your creditors to get them to agree to this payment plan.

In a Trust Deed, you would make one simple lower payment each month to be split between your creditors rather than making several more expensive payments as you currently do. During the negotiations, your creditors are no longer allowed to contact you regarding missed payments or your debts. Once a trust deed has been agreed upon, if your creditors continue to attempt to contact you, they will be served with a harassment notice.

Have you ever had the threat of bailiffs or sheriff officers coming to your home to take away your property? If so, this would be a thing of the past in a Trust Deed. Being in a Trust Deed means that you have set up a formal arrangement with your creditors to pay back what you can afford and no more.  In a Trust Deed if you make your payments and stick to the plan, at the end of the four years, all your remaining debts will be written off. This can be as much as 85% of your total amount of debt.

If you think that a Trust Deed could be the answer for you, simply fill in the  above form and an adviser will be in touch to discuss your options with you.

Bankruptcy

Bankruptcy is a legal status in England, Wales and Northern Ireland that usually lasts for a year and can be used to get away from debts you can no longer afford to pay.

Going bankrupt can allow you to make a fresh start if you are no longer able to afford to pay your debts. However going bankrupt is a serious matter and should not be done without doing research before as it has serious implications on all parts of your life.

To apply to go bankrupt you can fill in an online application on the governments website. It cost £680 to go bankrupt and this can be difficult to come up with if you are struggling with day to day bills.

If you decide that bankruptcy is the best option for you then be aware that in doing so all non-essential assets may be sold in order to pay your bills such as your house, car and possessions. During the one-year period of bankruptcy your creditors may be able to claim a portion of any income you earn.

Bankruptcy is a serious matter however there are alternatives available. If you would like to speak over the options that may be available to you then simply fill the above form to speak to an adviser.

Debt Arrangement Schemes (DAS)

A Debt Arrangement scheme is a good alternative to bankruptcy if you live in Scotland and you need more time to pay your debts without being chased by creditors. A Debt arrangement scheme is the Scottish equivalent of a debt payment plan in that your leftover income after expenses is used to pay back your debts at a reduced rate. During a DAS, your creditors shouldn’t contact you and are not allowed to add interest and charges to your debts.

If the worst was to happen and your situation changes, you can apply to vary your payments or apply for a break of up to 6 months. However, this also applies if your circumstances change for the better, your creditors are allowed to apply for a change in your circumstances in order for you to pay back more of your debts. For example, you could get a promotion and wage rise at work yet have to pay more into your DAS and have the same left over at the end of the month once your payment is made.

Once a debt arrangement scheme has been arranged and set up, your details will appear on a register of insolvency and this can be accessed by anyone. If you feel as though a DAS could be the solution to your financial problems fill in the above form and an advisor will be in touch.

Debt Management Plan

An option to get a handle on your debts is a Debt Management Plan (DMP). With a DMP, you appoint someone to negotiate a payment plan with your creditors based on what you can afford to pay them every month.

A Debt Management Plan is similar to an IVA and Trust Deed in that you make a one smaller payment which is then split between your debts – but it has crucial differences.  Similar to an IVA and Trust Deed, an advisor would go through an income and expenditure with you to find out what you can afford to pay back to your creditors. If you have fallen behind with your bills such as rent, council tax and other debts, a Debt Management Plan could be used in order for you to catch up and pay them back in full.

This is where the similarities with an IVA and Trust Deed end. In a Debt Management Plan, your creditors do not need to agree to it. This means they will still be sending letters notifying you that you owe them money; however, they do have to accept the payment as a contribution to your debts. In a DMP, your creditors will continue to add interest and charges onto your debt so whilst you may be making payments towards your debt the amount you owe may still be growing.

In a DMP, there is no set timescale, you will pay your debts until you are repaid in full or if your creditors decide to write off your remaining debts but this means that you can be paying these debts back for several years. Some DMP’s have extended over 10 years and are still going on to this day.

Lastly, as you are technically in debt and not meeting the original agreed payments, your credit rating may be affected. This can affect you getting credit in the future. If you need help with your debts fill in the above form and someone will be in touch shortly to help.

Debt Relief Order

A debt relief order or DRO is a formal arrangement meant to help people with low income and little to no assets. It can be used as an alternative to bankruptcy.  A DRO typically lasts a year and during this time you will not have to make payments towards most types of debt that may be included.  If you manage to get a DRO it will have an impact on your life for years to come. The DRO will remain on your credit file for 6 years and will make getting credit anywhere difficult or open you up too much higher levels of interest should you get any.

A DRO is suitable for people that don’t own their own home , don’t have much spare money at the end of the month and have debts less than £20,000 or if you are in Northern Ireland £15,000. A DRO can take into account a range of types of debt however there are some that are not included.

Some of the debts that are included are credit cards, rent arrears, benefits overpayments & business debts as well as others. If you obtained any of the following debts by fraud, then you will not be able to take these into account and may still be pursued for them.

Debts such as student loans, child support and court fines cannot be included into a DRO and you will still have to continue to pay these should you obtain an arrangement.

A DRO has several restrictions attached around it such as, when in a DRO you are not allowed to borrow more than £500 without telling your creditors that you are in a DRO. You are not allowed to establish or take part in the setting up of a company during the period of the arrangement without getting permission of the courts. Lastly when in the arrangement and for a few months after your details will appear on the insolvency register which anyone can view.If you need help with your debts fill in the above form and someone will be in touch shortly to help.

Sequestration

Sequestration is the Scottish service for bankruptcy, it is a legally binding agreement to deal with debts that you are unable to pay within a foreseeable period of time.  To qualify for sequestration you must have over £3000 of debt and the relevant certificates as issued by the AiB.  When applying for sequestration there is an application fee of £200 and you must not have been made bankrupt in the last 5 years.

During the sequestration process a trustee is in charge of all your assets including your home , car , possessions and furniture. During this process your trustee may sell these in order to settle the debts with your creditors.

Similarly to becoming bankruptcy in England during this time your trustee can decide whether or not to include your income and if so take a portion of it in order to pay your debts.

If you think sequestration is the option for you or are wondering about the alternatives to bankruptcy then contact an adviser by filling in the contact form above.