Help with your Debts

If your debts are getting on top off you don't worry help is at hand with our helpful Debt Guide.
First of all establish your level of debt, check balances, repayment terms, establish your ability to repay the debt.
Most importantly identify if the debt is impacting on your life.
If you feel that your debt is manageable then great, however you may wish to put some money aside to make overpayments to reduce or pay off the debts earlier. Re-financing and remortgaging are options which enables you to consolidate your debts into one simple monthly payment.
If your debts are becoming unmanageable and are spiralling out of control then there are a number of viable options that can help:-
Debt Management Programmes:-

A Debt Management Plan is an agreement between you and your creditors to pay all of your debts.

Debt management plans are usually used when either:

  • you can only afford to pay creditors a small amount each month

  • you have debt problems but will be able to make repayments in a few months

You can arrange a plan with your creditors yourself or through a licensed debt management company for a fee. If you arrange this with a company:

  • you make regular payments to the company

  • the company shares the money out between your creditors

Debt Relief Order:-
Debt Relief Orders (DROs) are one way to deal with your debts if you owe less than £20,000, do not have much spare income and do not own your home.
If you get one:
  • your creditors cannot recover their money without the court’s permission
  • you’re usually freed (‘discharged’) from your debts after 12 months
You get a DRO from the official receiver, an officer of the bankruptcy court, but you must apply through an authorised debt adviser. They’ll help you fill in the paperwork.
There’s a list of organisations that can help you find an authorised debt adviser in the guide to DROs.
The Money Advice Service has information about where to get free debt advice.
Individual Voluntary Arrangement (IVA):-

An Individual Voluntary Arrangement (IVA) is an agreement with your creditors to pay all or part of your debts. You agree to make regular payments to an insolvency practitioner, who will divide this money between your creditors.

An IVA can give you more control of your assets than bankruptcy.

The Money Advice Service has information on organisations that can give you free advice about whether an IVA is right for you.

Use an insolvency practitioner to get an IVA.

Your insolvency practitioner works out what you can afford to repay and how long the IVA lasts. You’ll have to give details about your financial situation, for example your assets, debts, income and creditors.

Your insolvency practitioner will contact your creditors. The IVA will start if the creditors holding 75% of your debts agree to it. It will apply to all your creditors, including any who disagreed to it.

An IVA will stop your creditors taking action against you for your debts.

Bankruptcy

You can apply to make yourself bankrupt if you cannot pay your debts.

Check if there are other ways you can deal with your debts before you apply for bankruptcy.

Your application will be looked at by someone who works for the Insolvency Service called an ‘adjudicator’. They’ll decide if you should be made bankrupt.

The process is different if someone else is applying to make you bankrupt.

How to apply

You can only apply for bankruptcy online. It currently costs £680.

Free Debt Advice:-
Citizens Advice can provide free help in person or by phone. StepChange Debt Charity can provide advice or a free debt management plan (DMP) National Debtline can offer free advice by phone and help you set up a free DMP. PayPlan is an independent provider of free DMPs
Press the links below and they will take you directly to their websites

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