Debt Solutions
Which debt solution is right for me?
There are a number of
debt solutions available which are listed below. Our debt advisors will discuss the best
solution for you based on your personal circumstances.
What debt solutions are available to me?
Debt Management Plans
A Debt Management Plan is set up by a third party between you and your creditors. It involves a negotiation where debt repayments are evaluated according to what you can actually afford to pay back. The interest on your
debts may be frozen but this is up to the creditor.
Individual Voluntary Arrangements (IVAs)
IVAs were introduced by the Government in 1986. An
IVA is a binding legal agreement between you and your creditors. The IVA typically lasts for a period of up to five years and at the end you will be completely free of your unsecured debts.
If you have unsecured
debt in excess of £15,000, then an IVA may be the right
debt solution for you.
Trust Deeds (Scotland only)
A Trust Deed is a legally binding voluntary arrangement, available only in Scotland, which offers debtors an alternative to bankruptcy (sequestration). It is similar to an IVA, but normally lasts for three years.
Debt Consolidation Loans
A consolidation loan combines your debts together into one lump sum which you pay off over an extended period of time. This may be the right
debt solution for those whose debts are not too high or who have recently had a reduction in income. It may also benefit those who have a sudden change in financial commitments.
Remortgages
A remortgage involves switching your mortgage to a different mortgage lender and is particularly relevant if the value of your home has risen since you took out the original mortgage. If you own your home, it may be possible to increase your mortgage to consolidate your debts and lower your monthly payments, making your overall debts easier to manage.
Bankruptcy
Bankruptcy is a
debt solution that should be considered very carefully and thorough advice must be obtained from an Insolvency Practitioner. Filing for bankruptcy will rid you of your debts, however there are more serious consequences than with other solutions. It is more likely you will lose your home or other assets and news of your bankruptcy is published openly. For many professions, bankruptcy can result in job loss.
Full and Final Settlement Offers
A Full and Final Settlement Offer is an offer of partial repayment to your creditors in the form of a one-off lump sum payment in return for having the remainder of your debt written off. A Full and Final Settlement Offer is a suitable
debt solution if you have access to a lump sum of money, eg an inheritance or redundancy payout.
For more information contact us on
0800 707 6109.