Debt solutions
Key characteristics
These types of arrangements are not court ordered or approved, and are suitable for people who are experiencing debt problems but are likely to be able to make the normal repayments again in the near future, normally in a few months. The informal arrangement may be an effective solution for people with short-term financial problems. Find out more >>>
Key characteristics:
Payments are made until the debt is cleared in full or until you are able to make the full repayments again. The arrangement is made on your behalf by a third party (debt management company) who will also negotiate the reduced payments with your creditors and distributes your available income. The repayments to creditors are based on what you can afford after a realistic financial statement including your income and spending has been prepared. Find out more >>>
Key characteristics
Debt consolidation in many cases is an unsecured loan, where a credit provider lends you some money to pay off all other loans. Because the loan is unsecured, you don’t risk losing your property if you don’t repay the debt. In other cases re-mortgaging or taking out a secured on your property loan could help you to get some money to pay off your existing debts. But, if you default on repayments, the secured creditor can repossess your property or can have a claim on the proceeds if the property is sold. Find out more >>>
Key characteristics
You can ask the court to make the administration order if you owe less than £5,000 to at least two creditors and you have a county court or High Court judgment against you and you can’t pay it in full. You make one payment a week or a month to your local county court, which shares the moneys between your creditors, in proportion to the amounts you owe them. If you don’t keep up your payments, the order can be revoked and the creditors can start their debt recovery action again. Find out more >>>
Key characteristics
A DRO is available to people who are struggling to pay their debts of no more than £20,000, whose assets are no more than £1,000 and whose disposable income, after deducting normal household expenses, no more than £50 per month. Certain assets are excluded from the calculation, for example clothing, furniture and a vehicle worth less than £1,000. There is a fee of £90 payable to an approved intermediary. The application is then considered by the official receiver from the UK Government’s Insolvency Service. Find out more >>>
Key characteristics
An IVA proposal sets out how you intend to repay your creditors, usually over a period of five years. The arrangement provides for you to rearrange payment of your debts and for your creditors to accept less than 100 pence in the pound of their debts. Once the proposal is prepared, a meeting of the creditors must be called by the nominee where the creditors will than have the opportunity to vote on the proposal. If at least 75% by value of the creditors vote in favour, the IVA will be approved. In general terms, creditors vote in favour of the IVA if they receive a better outcome than in case of your bankruptcy. Find out more >>>
Key characteristics:
- Your property and assets are shared out fairly among you creditors.
- Your financial and business affairs will be dealt with by a specially appointed professional.
- You are freed from the majority of debts after 1 year.