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Formal debt solutions can help you

You could write off unaffordable debts

Reduce & consolidate repayments

Freeze interest and charges

Legal protection against creditors

Check your options

May not be suitable in all circumstances. Your credit rating may be affected. Fees apply on successful applications which will be advised and built into your payment plan.

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By filling out this form, we will conduct a fact-finding call with you, we DO NOT give advice, but we partner with trusted companies who can give advice, our job is to collect the information needed to formulate an overall picture of your circumstances. So, if you do think you need a solution, we have all the information and evidence to hand to help the firm and yourself to make an informed decision.

Money Helper (formerly The Money Advice Service) is a free service set up by the Government to help people make the most of their money. If you would like to learn more click here.

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Understanding debt solutions

Individual Voluntary Arrangements (IVA)

IVA Advantages
One affordable monthly payment
All of your necessary living costs will be taken into account before an IVA payment plan is agreed.
Stop interest and charges

Whilst subject to an approved IVA, any interest and / or charges are frozen. These can’t and won’t be added to your debts by your creditors, preventing the debt amount from increasing.

Write off a significant percentage of your debt

Typically, an IVA lasts for five years. Provided your agreement is adhered to, your remaining unsecured debt will be written off.

Protect your home and vehicle
Essential assets such as your home or vehicle are usually protected during an IVA. You may retain these, provided they are of a reasonable value.
Stop worrying calls and letters from your creditors

Once your IVA has been accepted by creditors, they are bound, by law, to no longer contact you requesting payment directly. The IVA provider will deal with creditors on your behalf.

Stop court and bailiff action
Provided you are sticking to your IVA terms, creditors are not entitled to take any legal action against you – including sending bailiffs to visit you.
IVA Disadvantages
Requires creditor agreement

A high proportion of IVAs proposed are accepted however your creditors don’t have to agree to an IVA, and therefore we can’t guarantee it.

An Insolvency Practitioner will only propose an IVA on your behalf if they believe there is a good chance of it being approved.

Keeping to a budget

The regular monthly repayment that an IVA requires you to commit to, will mean that you need to manage finances within a budget. If you’re not used to doing this, you might find this difficult.

It will affect your Credit Score

An IVA will remain on your credit file for 6 years from the date it is approved, or until your IVA is finished. If your IVA runs for 5 years, it will remain visible for a further 12 months from the date of completion

IVA Added to Individual Insolvency Register

Your IVA will be added to the Individual Insolvency Register. This will be removed 3 months after the IVA completes.

You pay fees to your IVA company

The fees that are paid in an IVA are typically built into your affordable monthly repayment

Approval required for further credit

You are unable to take any credit of £500 or over without gaining the explicit consent of your IVA Supervisor.

About IVA’s 

An Individual Voluntary Arrangement (IVA) is a legally binding agreement made between you and your creditors to pay back an affordable portion of their debt over a set period. 

How does an IVA work?

An IVA allows you to pay one affordable monthly payment over a set period of time (usually five years). Your Insolvency Practitioner will make payments to your creditors on your behalf out of the money that you pay in.

IVA’s are put forward and overseen by a licensed professional known as an Insolvency Practitioner or ‘IP’. After a detailed discussion with you to understand your financial situation, an IP will aid you in preparing a formal document called a ‘Proposal’ which is provided to your creditors. The proposal summarises your financial position, and outlines the fair offer of repayment that you want your creditors to consider.

Your creditors are then able to vote as to whether they wish to accept your proposal. In order for the IVA to be approved, 75% (by value) of voting creditors must be in favour of your offer.

From the money you pay, fees will be taken to cover the cost of administering your IVA. These fees are detailed in your IVA proposal and will be agreed by your creditors. Fees are not charged on top of your monthly repayment, but are included in your affordable monthly repayment.

Upon successful completion of your IVA, any remaining unpaid, unsecured  debts will be written off.

An IVA is only available in England, Wales and Northern Ireland

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Debt Relief Order

Debt-Free after 12 Months

DRO Benefits
No Monthly Repayments

If a DRO is successful all you need to pay is the £90 up front fee

100% of Unsecured Debt Written Off

Your debts will be written off after 12 months, provided you continue to meet the DRO qualifying criteria.

Legal Protection from Creditors

You are legally protected with a Debt Relief Order.

DRO Disadvantages
£90 Receivers Fee

There is a one off official receivers fee of £90 which your debt advisor will tell you how to pay.

DRO Added To Individual Insolvency Register

Your DRO will be added to the individual insolvency register. This will be removed 3 months after the DRO end period. 

It will affect your credit score

A DRO will remain on your credit file for 6 years from the date it is approved.

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About DROs (Debt Relief Order)?

A DRO or Debt Relief Order is a formal debt solution that lasts 12 months. A DRO is only available subject to strict criteria being met. We recommend people consider their eligibility for a DRO before applying for an IVA.

How does a DRO work?

Your personal debt circumstances will be assessed by an advisor, including your total assets and your disposable income.

You will only qualify for a DRO if all of the following apply:

  • You have a monthly disposable income of £75 or less
  • Your assets are worth no more than £2,000
  • If you own a vehicle, it is valued at no more than £2,000
  • Your unsecured debt level is no more than £30,000

If you are applying for a DRO, your application will need to be submitted through an ‘Approved Intermediary’; which is a company registered with the Insolvency Service to provide the solution.

There is an upfront, one-off fee of £90.

A DRO is in place for 12 months during which time, you are not expected to make payments on your unsecured debts. You are legally protected against your creditors who will not be able to take any action against you during this time.

Providing you continue to meet the qualifying criteria, a DRO is complete after 12 months and all debts that were included in it will be written off.

A DRO is only available in England and Wales.

Debt Management Plan (DMP)

DMP Advantages
One affordable monthly repayment

When you make a payment towards your Debt Management Plan it is distributed between your creditors on a pro-rata basis on your behalf.

You no longer have to deal with creditors directly

Most contact from creditors will be dealt with by the Debt Management company on your behalf.

Interest and charges may be stopped

Creditors may agree to reduce or freeze interest and charges, although this is not guaranteed.

Flexible informal solution

A DMP can be a useful temporary measure when you are struggling to pay your creditors due to a short-term change in circumstances. It is less restrictive than other, formal debt solutions.

DMP Disadvantages
An informal solution with no debt forgiveness

Unlike other formal solutions (such as DRO, IVA or Bankruptcy), it is likely a DMP requires full repayment of your debts and could potentially be a longer term solution.

The length of the DMP is not fixed

How long the plan will last will be determined by the monthly amount you pay, the total amount of money you owe to creditors, whether your creditors agree to stop interest and charges, and whether your DMP provider charges a fee.

Your credit score may be affected

A Debt Management Plan is likely to have a negative impact on your credit rating, making it more difficult to obtain credit in the future.

No Legal Protection

Creditors can choose to continue with their debt collection process, which can lead to further action such as a default or County Court Judgement.

About DMP’s

A Debt Management Plan (DMP) is an informal agreement between you and your creditors that has been negotiated, usually by a third party, to lower the monthly payments being paid to your creditors.

How does a DMP work?

A debt management company will complete an assessment of your income and expenditure to calculate your affordable monthly repayment. They will also need a full list of your creditors and how much you owe to them.

A debt management provider can either be a debt charity or a fee charging company. If you choose to use a fee charging company, there will usually be set up fees and a monthly management fee which will be included within your monthly repayment. The remaining funds are then distributed amongst your creditors on a ‘pro-rata’ basis which means that the creditors you owe the most to, receive the biggest proportion of the payment.

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Bankruptcy

Bankruptcy Advantages
You could be debt free after 12 months

You are automatically discharged after 12 months. There may be occasions where a Bankruptcy lasts longer than 12 months, if this is necessary it will be explained to you by your Trustee.

Legal Protection

Once approved, creditors can no longer proceed with legal action against you.

No longer dealing with your creditors

The Official Receiver will deal with your creditors on your behalf so you no longer have to

Available to everyone

Unlike a DRO there is no strict qualifying criteria that you need to meet before you can apply.

Interest & Charges

Interest and charges are frozen once the bankruptcy application has been approved.

Bankruptcy disadvantages
Lose control of assets

If you own a home or possessions of significant value, these items could be sold to help repay your debts.

You will be allowed to keep everyday household items and tools required for your employment.

There is a fee to pay before you apply

There is an application fee of £680, although this can be paid in installments.

The fee needs to be paid in full before your application can be submitted. There are additional fees that are involved if you have any assets that are sold as part of the bankruptcy

Payments from your income

You could be asked to make payments towards your debts for a period of up to 3 years.

It will affect your credit score

Bankruptcy will be recorded and have a negative impact on your credit file for a period of 6 years.

Bankruptcy added to Individual Insolvency Register

Your personal details will be recorded on the Insolvency Register which is a public record.

Affect on employment

Bankruptcy may impact your employment; therefore, you should always check the terms of your employment contract before making an application. You are also unable to be a company director unless you have permission from the court.

About Bankruptcy

If you live in England or Wales, declaring bankruptcy is a way for you to deal with unmanageable debts. Bankruptcy is a formal, legal procedure where you apply to write off your debts.

How does Bankruptcy work?

Before being declared bankrupt there is an upfront cost payable of £680. This is payable in instalments although your application will not be processed until the full fee is paid.

You must submit an application online via https://www.gov.uk/apply-for-bankruptcy. You will be required to include information about your income, expenditure, debts and assets. Your application will be reviewed by an adjudicator, and you will be notified if the bankruptcy order has been granted. If successful, the Official Receiver (an officer of court who manages your bankruptcy) will be appointed and will contact you to advise on the next steps required, which could include you having to complete a questionnaire or attend an interview.

If you have any assets which can be sold, you may be requested by the Official Receiver to do so in order to pay your creditors. They may also request for you to make contributory payments (this could be for a period of up to 3 years). Your previous financial dealings will be assessed, and this will include the disposal of any significant assets in previous years. If it is determined that your previous actions may have contributed to the bankruptcy, the Official Receiver can put restrictions in place that can last from 2 to 15 years.

In most cases you will be automatically discharged from Bankruptcy after 12 months.

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