Services

IVA

An IVA (Individual Voluntary Arrangement) is an agreement whereby you pay your creditors a set amount each month that you can afford, the rest of the debt is written off.

Trust Deed

A Trust Deed is a formal agreement between you and your creditors to pay back what you can afford towards your debts.

This is an extremely powerful legal tool to help you back on the road to financial stability.

Debt Relief Order

A Debt Relief Order is a form of bankruptcy where debts are written off within 12 months.

It stops any legal action again you, stops creditor and bailiff contact and hassle.

Bankruptcy

If your debts are particularly high and / or your income is low, you may need to think about declaring yourself bankrupt as a means of managing debt

Debt Management Plan

A Debt Management Plan (DMP) is an agreement between you and your creditors to pay all your unsecured debts.

Loans

Loans can either be secured or unsecured.The main difference is that with a secured personal loan, you have to provide an asset as collateral.

Individual Voluntary Arrangement

An IVA is an agreement whereby you pay your creditors a set amount each month that you can afford, the rest of the debt is written off.

It's most appropriate for those who have debts of more than £6,500 and cannot afford to meet repayments, who see missed payment charges incurred, interest increasing and their debt spiralling.

However, the advisor will be able to shed more light on this and discuss whether it is the right option for you. We can tell you, without obligation, how best to get on a stable financial footing.

Figures currently show that people in the UK have an average debt of £27,871.13 and no matter how much you are struggling, an IVA will help with your unsecured creditor payments you are struggling with.

Pros Vs Cons

Advantages

One affordable monthly payment made to Insolvency Practitioner over a fixed period of time generally 5 years

Creditors consent is required to approve an IVA but only 75% of those that decide to vote at the creditors meeting are needed to approve the IVA

Following approval of an IVA, creditors cannot take further action to enforce the debt, and all interest and charges are frozen.

The costs are deducted from the payments you make each month NOT over and above

Any outstanding balances from qualifying unsecured debts, owed at the end of the successful term are written off.

You cannot be forced to sell your property whilst subject to an IVA

Disadvantages

Approval of an IVA is not guaranteed, creditors may reject your proposal.

There are Insolvency costs associated with an IVA (Nominee Fee generally £1,100, Supervisors fee of 16.5% of monthly repayments and supervisors costs reimbursed approx. £1,100 charged over the life of the plan. The costs are deducted from the payments you make each month NOT over and above

Your credit file can be affected for 6 years

Your information is placed on the Register of Insolvencies which is a public register

In the final year of the IVA, you will be expected to attempt to re-mortgage your property to increase the payments to creditors, although any possible re-mortgage is subject to strict criteria to protect you

Trust Deeds

A trust deed is an agreement with your lenders that could help you if you don't think you can afford to repay everything you owe.

You agree to repay as much as you can towards your unsecured debts - normally for four years - and at the end of that time, any remaining unsecured debt is written off.

During your trust deed, you'll also be protected against further action from lenders included in the agreement - so they won't be able to make you bankrupt or demand higher payments.

Pros Vs Cons

Advantages

One affordable monthly payment made to Insolvency Practitioner over a fixed period of time generally 4 years

Creditors consent is required to approve a Trust Deed, as long as 33% of your creditor value do no not object you will be Protected

Following approval of an Trust Deed, creditors cannot take further action to enforce the debt, and all interest and charges are frozen

The costs are deducted from the payments you make each month NOT over and above

Any outstanding balances from qualifying unsecured debts, owed at the end of the successful term are written off

You cannot be forced to sell your property whilst subject to an Protected Trust Deed

Equity is agreed before signing a Trust Deed and will not be changed during the term

Disadvantages

Approval of an Trust Deed is not guaranteed, creditors may reject

There are costs associated with an Trust Deed

Your credit file can be affected for 6 years

Your information is placed on the Insolvency register which is a public register

Debt Relief Order

A debt relief order is a form of bankruptcy where debts are written off within 12 months.

It stops any legal action again you, stops creditor and bailiff contact and hassle.

To qualify for this help you cannot:

  • Have any assets worth more than £1,000
  • Have any Debts of less than £20,000
  • Have a disposable income more than £50
  • Live in Scotland
  • Have had a DRO within 6 years.

Pros Vs Cons

Advantages

The duration of the DRO is usually 12 months

You do not need to make any payments into the DRO

Creditors cannot take further action against you without permission from the Court

The fee for entering into a DRO is £90, no other fees are available

Disadvantages

Your credit rating will be affected for 6 years.

You will not be able to get a Debt Relief Order if you have assets worth £1,000 or more or own a property

If your circumstances change and you can afford to make repayments or you fail to cooperate, the DRO may be revoked

Your information is placed on the Register of Insolvencies which is a public register

Bankruptcy

Sometimes, there’s simply no way to repay what you owe in a reasonable time.

If your debts are particularly high and / or your income is low, you may need to think about declaring yourself bankrupt.

Like an IVA (Individual Voluntary Arrangement), bankruptcy is a form of insolvency: it’s a legal process that will share out your assets fairly among your creditors, protect you from further legal action and upon successful completion (normally after 1 year), write off your outstanding debt allowing you to make a new start.

Pros Vs Cons

Advantages

A quick procedure as in the majority of cases you would be discharged within 12 months

Releases you from creditor pressure

Debts are written off

Benefit Only Income – No payments would be taken from your benefits.

Disadvantages

You could lose any assets of value if these are sold by the Official Receiver or Trustee appointed over your case. (Household items are excluded)

If you have equity in your property, the Trustee appointed will look to realise the equity to repay fees and creditors

Your credit file will be affected for 6 years

If you have a disposable income available, then An Income payment order / agreement will be enforced for 36 months

Your information is placed on the Register of Insolvencies which is a public register

Bankruptcy may affect certain employments

You can’t obtain credit of more than £500 without disclosing you are bankrupt

To petition for your own bankruptcy costs £680, although it can be made in instalments

Debt Management Plan

A Debt Management Plan (DMP) is an agreement between you and your creditors to pay all your unsecured debts.

Debt management plans are usually used when either:

  • You can only afford to pay creditors a small amount each month
  • You have debt problems but will be able to make repayments in a few months
  • You do not qualify for debt relief due to assets you may have

This includes all non-priority debts ie Credit Cards, Loans, Pay day loans etc

A DMP will be based on you disposable income, the payment will continue until your debts have been paid off in full

Pros Vs Cons

Advantages

Flexible plan where you can increase or decrease payments to your creditors dependent upon your circumstances

Creditors may reduce your repayments and stop interest and charges, but are not obliged to do so

You make one affordable monthly payment to the DMP Company

There are certain non-fee charging organisations and charities that provide this service free of charge, you can contact MAS for more information

Disadvantages

Most commercial providers will charge for this service, (Management fees generally 50% of the first 6 months payments and then a monthly fee on average of £38 per month)

To be effective, all creditors need to agree to the plan

Creditors can withdraw at any time, and the plan offers no legal protection

There is no guarantee that interest and charges will be frozen however it does happen in the majority of cases

Credit rating is affected as you are not making the contractual monthly repayments

Loans

Loans can either be secured or unsecured.

A personal loan is a type of unsecured loan, which means the debt isn’t secured against any asset. Secured loans offer lower interest rates as it is secured against your property.

You can borrow a fixed amount over a fixed term and pay off the full amount plus interest making a set monthly payment.

The interest and charges are generally based on your credit rating.

The better your credit rating, the better interest rates you will be offered. Poor credit rating will mean higher interest rates, or you could be refused credit.

Pros Vs Cons

Advantages

You will only make one monthly payment to one creditor

Your credit rating will be unaffected, and may be repaired by making the contractual payments, if previously damaged

The monthly repayments may be more affordable than paying lots of individual creditors

Disadvantages

A setup fee and interest is normally charged on the loan and the debt is repaid in full

You may not be able to raise sufficient funds to consolidate all debts, and so could end up in a worse position

If your credit rating is poor, it is unlikely you will able to obtain a consolidation loan

You may be asked to secure this loan on your property if you have sufficient equity available