Alternatives to Debt Management Plans
Individual Voluntary Arrangements (IVAs)
If you have unsecured debt in excess of £15,000, then an Individual Voluntary Arrangement (IVA) may be the right solution for you.
Individual Voluntary Arrangements (IVAs) were introduced by the Government in 1986. They provide a way for people to deal with their debts with fewer potential long term consequences than bankruptcy.
An
IVA is a binding legal agreement between you and the people you are struggling to repay. These may be credit cards or loan companies and are referred to as 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.
What does an IVA involve?
The arrangement involves you making one affordable monthly payment towards your debts. This continues for the length of the IVA, after which any outstanding debt is written off. The amount written off depends on your individual circumstances and can be as much as 60% of the debt. Additionally, interest on your debts will be frozen and creditors can not contact you asking for money. Things you own, such as your home, can be protected under the IVA.
How can you set up an IVA?
The IVA can only be supervised by a licensed practitioner such as those at Debt Fixers.
For more information contact us on
0800 707 6109. One of our highly skilled advisors will guide you through the process and get you on your way to financial freedom!
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 designed to enable those who cannot manage their debts to establish a monthly repayment schedule based on what they can afford to pay their creditors. The Trust Deed will last for a specified period, normally three years. When the specified term of the arrangement comes to an end, any remaining debts are written off.
For more information contact us on
0800 707 6109.
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 can mean stress levels are reduced as you will not have to worry about paying numerous creditors.
This may be the right 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.
It is possible that if you have enough equity in your home to cover your debts, but re-mortgaging is not in your best interest, a consolidation loan may have to be secured against your home.
In all instances, our advisors will discuss your individual circumstances to ensure you find the solution that works for you.
For more information contact us on
0800 707 6109.
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.
As many of our clients have CCJs, arrears or just need to lower their monthly repayments, we are able to offer specialist advice for these cases and will make sure we find the best solution for you.
Our team of qualified mortgage advisors will discuss your individual circumstances and explain your options.
For more information contact us on
0800 707 6109.
Bankruptcy
Bankruptcy is an option 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.
The period of a bankruptcy lasts up to a year, after which those debts that have not been paid are written off and you are 'discharged' from the bankruptcy. You may still have to make monthly payments for up to three years under the terms of your bankruptcy order.
For more information contact us on
0800 707 6109.
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 strategy to clear your debts 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.