Help on Dealing with Debt is available through this website, although we as a company are not authorised to give advice on debt matters, but you may want to click on the links below to contact companies that specialise in debt matters and are authorised to give advice on all aspects relating to debt.
Although we cannot give you advice of the best way to proceed with trying to sort out your debt or dealing with debt, we can certainly point you in the right direction by clicking on the banner above.
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Remember, if you are in debt, don’t bury your head in the sand, but seek free legal advice quickly. Delays will only make it worse.
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Debt Product Types:
Debt Management Plans (DMP)
If you have enough money left over after paying your priority creditors and essential expenses, you may qualify for a debt management plan for dealing with your debt.
A DMP for dealing with debt is an informal arrangement with your creditors to pay back the debt by a specified amount of monthly installments.
A debt management company will contact all your creditors to set up the plan, which will mean that the pressure is taken off you immediately. Some DMP providers charge for this service, although there are several who will do it for free.
You may be able to apply to the county court for an administration order for dealing with debt. This is a formal and legally binding agreement between you and your creditors to pay back your debts over a certain period of time.
You can apply for an Administration Order if your total debts are less than £5,000 and you have a county court judgement (CCJ) against you. The court decides the amount you have to pay depending on your income. The court can agree that you only pay part of the total debt. This is called a composition order.
Once the order is agreed by the court, you make one regular payment to the court and your creditors can’t take any further action to get the money back, as long as you keep making the payments each month.
Individual Voluntary Arrangements (IVAs)
If you have some spare income each month, you may be able to arrange an Individual Voluntary Arrangement (IVA) for dealing with large debt.
An IVA for dealing with debt is an agreement that is made with your creditors to pay off your debts over a set period of time and is one option you can use to pay off all of your debts. It is a formal, legal debt solution which is approved by the court and your creditors have to abide by it.
An IVA for dealing with your debts must be set up by a qualified person called an insolvency practitioner.
Debt Relief Orders
Debt relief orders for dealing with debt are only available in England and Wales.
A debt relief order (DRO) is an order that you may be able to apply for if you can’t afford to pay off your debts. It is granted by the Insolvency Service and is a cheaper option than going bankrupt.
It usually lasts for a year and during that time, none of your creditors can take action against you to get their money back. At the end of the year, you are free of all of the debts listed in the order.
If you have no money left over to pay your debts or you have so little that it will take many years for you to pay off your debts, you may want to look at bankruptcy for dealing with severe debt as an option.
Going bankrupt for dealing with debt can take the pressure of creditors away from you, but you must consider all of the pros and cons before you do.
You are allowed to keep certain things, like household goods and a reasonable amount to live on.
When the bankruptcy order is over, you can make a fresh start and the money you owe is usually 100% written off completely. In many cases, this can be after only one year.
Creditors have to stop most types of court action to get their money back following a bankruptcy order.
See also Debt Consolidation Loan Bad Credit.