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Everything you need to know about the debt solutions available to you

July 20, 2020
Everything you need to know about the debt solutions available to you

We understand how daunting debts can be, as it can take over your life and make you feel like you no longer have control over your finances – That’s where we come in. The debt solutions we offer advice on, enable you pay off your debts over an agreed period, without the stress of debts hanging over your head.

We provide advice on a range of debt solutions including: IVA’s, Debt Relief Orders, Bankruptcy, Debt Management Plans and Protected Trust Deeds. Here is everything you need to know about these debt solutions:

An Individual Voluntary Arrangement (IVA)

An IVA is a formal legally binding agreement set up by a licensed insolvency practitioner with your creditors. This agreement allows the insolvency practitioner to put you on a plan to pay all or parts of your debts at an agreed amount over a period. Once you agree to make a regular payment to an insolvency practitioner, they divide the amount you pay between creditors if you have more than one. The IVA officially starts once a meeting of creditors is approved. Once the IVA is completed any remaining balances will be written off. (Read more on IVA) 

Bankruptcy

Bankruptcy is a legal proceeding which involves a business or a person who is unable to pay back outstanding debts. The process of bankruptcy begins once a petition is filed by you which is most common.  Please be aware that bankruptcy could be instigated by your creditors. All your assets are then measured and evaluated to ensure that they can be used to repay a portion of your outstanding (Read more on bankruptcy

Debt Relief Orders

A DRO is a more simplified, quicker, and cheaper way to pay off your debts if you owe less than £20,000, have very few assets and are not a homeowner. A debt relief order is also seen as a cheaper alternative to bankruptcy. It’s important to consider the fee you must pay of £90.00 and make sure you are not currently involved in any other formal debt procedure before applying for Debt Relief Orders. (Read more on Debt Relief Orders

Debt Management Plan

A debt management plan (DMP) is a debt solution for anyone who may be in arrears with paying back their creditors. The process of a DMP begins by setting up a plan with a debt management company or a debt financial service. One of these services then works out if you can afford this plan, by calculating income, assets, debts etc.  Once all the checks are completed the company then contacts your creditors and asks them to agree to the plan. Before considering a DMP it’s important to consider both its advantages & disadvantages which you can read more about here.  

Protected Trust Deed

A protected trust deed is a voluntary yet formal arrangement for Scottish residents, which is set up by licensed insolvency practitioner. Please note that to apply for a trust deed you must be a resident of Scotland for a minimum of six months. Before applying for a protected trust deed, ensure you have read and have considered the benefits, risks and fees. You can find out more on protected trust deeds here. 

 

We offer advice on all the debt solutions explained above to help you make the right choice that could lead to a debt free future. No one should go through debts alone that’s why we are to help! To speak to an advisor or schedule an appointment click here

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