Write Off Unaffordable Debts & Save £1,000's With A Government Legislated Debt Relief Scheme
If you’re struggling with debts over £6,000, it can be hard to know where to turn.
Safe, Secure, Confidential & Free To Find Out
A small selection of debts you could write off
Here's an example of what we can do:
We consolidate all the debts onto one smaller monthly payment which allows you to get back on track.
*These figures are an example of a customer helped by one of our trusted partners
Total Unsecured Debt
Old Monthly Payment
New monthly debt repayment
Debt written off
Your Current Monthly Payment
Your New Monthly Payment Will be
Benefits Of An IVA
Write Off Unaffordable Debts
Freeze all interest and charges
One affordable low monthly repayment
No upfront costs
Protect your assets
Stop lenders contacting you
Debts you can't include
debts you can include
Let's Get Started
*no contact details required to find out if you qualify
IVA - Individual Voluntary Arrangement - Not Available In Scotland
What Is An IVA?
An individual voluntary arrangement (IVA) is a formal agreement which allows you to make payments to your creditors, usually over five or six years. At the end of your IVA any unsecured debt that has been included in the arrangement is written off. There is no limit to the amount of debt that can be included in IVA and most unsecured debts can be included. An IVA can help to make unmanageable debts affordable again by reducing your debt repayments to an affordable level again and making sure that you have enough left over for your bills and other living costs.
When you enter into an IVA a proposal will be put to your creditors and if 75% of them (by debt value) agree to the proposal, then the IVA will be put into place.
An IVA is only available in England, Wales and Northern Ireland. If you are in Scotland a similar solution is a Trust Deed.
Benefits Of An IVA
- You make one monthly payment usually for a period of 5 years
- Interest and charges are frozen if the IVA is accepted
- If you are a homeowner, you can keep your home providing that you maintain payment towards your mortgage any secured loans
- There are no set up fees with an IVA. Any fees charged by the Insolvency Practitioner are usually included within your monthly payment
- An IVA is legally binding on your creditors and if accepted your creditors cannot take further action against you or contact you, other than to send statements or default notices.
Drawbacks Of An IVA
- An IVA will affect your credit rating and will be registered on your credit file for 6 years
- If the arrangement fails, there is a risk of bankruptcy
- Details of an IVA are registered on the Insolvency Register which is a public register
- If you are a homeowner you may be required to release equity in the final year of the IVA and a remortgage may only be available on less favourable terms. If you are unable to remortgage, you may need to make additional payments for a further 12 months
- There are restrictions on expenditure for someone entering into an IVA
PTD - Protected Trust Deed - Scotland Only
What Is A Protected Trust Deed?
It is designed to help people with unaffordable debts of at least £5,000 and needs to be set up with the help of an Insolvency Practitioner who will charge fees to set up and supervise the PTD, however these fees will usually be included within the monthly payment which you make. The Insolvency Practitioner will write to your creditors and ask them to agree to the trust deed. Your trust deed will then become protected if a sufficient proportion of creditors agree to it.
The agreement usually lasts for four years and once it’s completed, any unsecured debts included will be written off. Trust deeds are not available if you live in England, Wales, or Northern Ireland. In these countries, IVA is a similar solution.
During your Trust Deed, you will continue to pay your bills and other important living costs and make a payment into your trust deed towards your unsecured debts. Your creditors will expect you to pay in as much as you realistically can afford, so may want you to cut back on expenditure in some areas.
Benefits of a Trust Deed
- You will be debt free within an agreed time frame
- Interest and Charges will be frozen once the Trust Deed is protected
- After successful completion any remaining debt included in the arrangement will be written off
- Creditor contact will stop once the Trust Deed is accepted
- A PTD will protect your home if you are a homeowner
Considerations of a Trust Deed
- Once your PTD is approved you are bound by formal insolvency proceedings and your credit rating will be affected
- Failure of a PTD could result in bankruptcy
- A re-mortgage may be required if you are a homeowner and if you cannot re-mortgage the PTD may be extended
- Your details will be recorded on the register of insolvencies
It is normally suitable for someone who is unable to meet their usual payments to their creditors. A DMP is arranged on your behalf by a third party which can either be a debt charity or a fee charging company. This means that you would make one payment to your DMP provider each month and they would distribute this fairly amongst your creditors on your behalf. If you chose to use a fee charging company, there will usually be set up fees and a monthly management fee which will normally be included within your monthly payment.
Secured debts cannot be included in a DMP – so you would need to keep making these payments separately. Decreasing the amount that you pay each month may result in it taking longer to repay your debt and it could cost more in the long run.
Benefits of a DMP
- As it is an informal arrangement you can increase payments to clear the debts quicker if your circumstances improve.
- In many cases interest and charges can be frozen however this is not guaranteed
- A DMP will give you one monthly affordable payment based on your household expenses
- A DMP is flexible so payments can be changed to suit your needs
Considerations of a DMP
- There is no fixed term
- Creditors could continue to take further action against you to recover the debts
- You could pay back more than the original debt
- As you are not maintaining contractual payments your credit rating will be affected
Under DAS you can apply for a Debt Payment Programme (DPP) which allows you to pay off your debts over a period of time. If your circumstances change you can apply to vary the terms of the DPP. You must seek the assistance of a Money Adviser before you can apply for a DPP.
You’ll keep making reduced repayments until you have repaid your debt in full which will take longer as you will be making reduced payments.
The DAS is not available if you live in England, Wales or Northern Ireland. In these countries, a debt management plan (DMP) is a similar solution although with different features, costs and associated risks.
Benefits of a DAS
- Interest and Charges are frozen if the debt payment plan is accepted
- It is legally binding on your creditors
- Any assets you have are protected
- You don’t have to pay an administration fee for the running of the DPP
Considerations of a DAS
- Your details will be registered on a public register (DAS Register)
- Your credit rating will be affected
- If you don’t keep up the repayments the DPP could fail and your creditors could add interest and charges and take further action.
DRO - Debt Relief Order - Not Available In Scotland
A DRO could help you by suspending any payments and writing off the debts after 12 months. A DRO is a much cheaper option to bankruptcy and costs just £90.
A DRO is not available if you live in Scotland, A Minimal Assets Process is a similar solution.
To be eligible for a DRO you need to meet the following criteria:
- You need to reside in England. Wales or Northern Ireland, or have done business in one of these countries in the last three years
- Your debts add up to less than £20,000
- You’re not a homeowner
- Your assets are worth less than £1,000 – though you can own a vehicle worth up to £1,000 in addition to this
- You have less than £50 a month left over after you’ve paid all of your living costs.
Benefits of a DRO
- Debts included in the DRO will be written off within 12 months
- No repayments will be made as long as your circumstances don’t change
- Creditor contact will stop once the DRO is in place
Considerations of a DRO
- Once your DRO is in place, you are bound by formal insolvency proceedings and your credit rating will be affected
- Your details will be recorded on the Insolvency Register
- If your circumstances change within the 12 months your DRO could be revoked
Bankruptcy works different in different parts of the UK, if you live in Scotland the process is knows as Sequestration.
Bankruptcy can give you a fresh start and will write off your debts however the decision should not be taken lightly as it can affect other areas of your life such as your employment or living arrangements. Bankruptcy usually lasts for 12 months and there are usually no payments required, however you may be required to make payments into your bankruptcy for up to 3 years under an Income Payments Order if you have any disposable income once your bills and essential living costs are covered. You could be asked to sell valuable assets such as your home or car, but you’ll be able to keep the things you need for day-to-day living.
Bankruptcy fees vary depending on where you live in the UK. In England and Wales you pay a total of £680. In Northern Ireland the total cost is £669. You can pay the fee in installments however you must have paid the fee in full before the application is made.
Benefits of a Bankruptcy
- Bankruptcy usually only lasts for 12 months
- Debts will be written off once the bankruptcy is discharged
- Creditor contact will stop once the bankruptcy is in place
Considerations of a Bankruptcy
- You could lose assets of value including your home if you are a homeowner
- Once your Bankruptcy is approved you are bound by formal insolvency proceedings and your credit rating will be affected
- Your details will be recorded on the insolvency register
- Your employment could be affected, and you are unable to act as a company director
Sequestration - Scotland only
Sequestration is a type of bankruptcy that is applicable only in Scotland. Bankruptcy and sequestration are very similar to each other. Sequestration is a way for Scottish residents with unmanageable or out of control debt situations to end the pressure. If you’re living in Scotland and facing significant financial troubles, sequestration may be an option for you.
What Is Sequestration?
You (or your creditors) can apply for sequestration if:
You are Scottish, or living/residing in Scotland for the past 12 months
You owe more than £1,500 in unsecured debts
You’re unable to repay your debts.
Usually Sequestration lasts for just one year (but not in every case), but it can have a major effect on your life.
How Does Sequestration Work?
Sequestration is a court-based insolvency procedure in which the control of your assets is given to a ‘Trustee’ who will be fully authorised to sell any of your assets (such as your home, vehicles or other high value items), with some exceptions. These steps are taken in order to help pay for the cost of managing your case and to repay your creditors as much as possible towards your outstanding debts. Remember, you may still be asked to contribute towards your debts by making a payment from your income, even after the sequestration period is over (generally a one-year timescale). As well as applying for your own sequestration, your creditors can also petition the Sheriff Court or Court of Session for your sequestration.
Benefits Of Sequestration
You can pay off your debt quickly - provided you co-operate fully, your Trustee may grant your discharge at the end of one year.
Your included debts will be written off once you have been discharged.
Your Trustee (this may be an IP or the Accountant in Bankruptcy) will contact your creditors on your behalf - creditors won’t contact you anymore and you will stop being chased for repayment of debts.
If you are receiving welfare benefits, these will not be classed as income for the purpose of calculating your monthly contribution
Drawbacks Of Sequestration
Sequestration is a form of formal insolvency and should be considered as a ‘last resort’ debt solution because of the serious impact it can have on your life.
If you are a homeowner or have assets, these could be sold to pay towards your debts.
Your credit rating will be affected and sequestration may affect your ability to obtain credit in the future.
Your employment choices may be affected, in a similar to those filing for bankruptcy in the rest of the UK. No one should ever consider applying for sequestration without first seeking advice from experts in this field.
Your sequestration will be displayed on an online Register of Insolvencies, which the public can search.
At National Debt Help, we offer advice on all Scottish debt solutions, making sure that you are fully aware of all the options available to you based on your individual financial circumstances. So, what are you waiting for? Contact us today to start regaining control of your finances.
© National Debt Advisor is a trading name of Leadfix Ltd. All rights Reserved
Leadfix Limited is registered in England and Wales, registration number 12087032. Licensed by the Information Commissioners Office, registration number ZA538511. Lead Fix Limited (FRN 940840) is an Appointed Representative of Superior Insolvency Solutions Limited who is Authorised and Regulated by the Financial Conduct Authority (FRN 811106)