Debt Management Options

Debt Management

A Debt Management Programme is a way of reducing your monthly repayments to your creditors down to an amount that you can afford, leaving you with the funds needed to pay for the essentials. We take all of your essential monthly expenditure into consideration such as mortgage or rent, council tax, secured loans, broadband, mobile phones etc, and demonstrate to your creditors just why you cannot afford to repay the debts at the rate that they would prefer. In nearly every case the Interest can be frozen so the payment comes off the balance and not the accruing interest.

If your income or any of the essentials that you have to pay for increase or decrease, we can alter your payment to your creditors. Whilst on the debt management programme we will deal with any correspondence or calls you may get from your creditors. We become your agent working for you to protect your interests.

Debt management is an accepted way of dealing with debt by the creditors as it shows commitment to repay, even if you can only afford a small amount every month, it can stop County Court action, repossession or even worse, bankruptcy. If you have a mortgage or pay rent, by reducing your monthly unsecured debt repayments you can make sure that your home is protected and arrears do not begin to accrue. If you contact us with mortgage or rent arrears, we can build this into your plan and notify your creditors, giving you the opportunity to clear the arrears in the quickest possible time.

Unlike some other debt management companies, our clients are not tied into a contract and can stay on the debt management programme for as long as they feel it suits them. It is one of the most effective ways of getting your finances under control.
 

IVA

If you have a significant debt problem (normally over £20,000), you may be eligible to begin a legal process known as an Individual Voluntary Arrangement.

This means that your creditors accept a reduced offer of repayment to settle their debt. By entering into an IVA, your total debt repayments - including costs - can be reduced by up to 75%!

Payments are usually made over five years, after which the remainder of your debt is written off. During the repayment period, all interest and charges are frozen and you will receive no more correspondence from your creditors.

• All interest and charges on your account are frozen.
• Your account is administered by a licensed Insolvency Practitioner, who takes responsibility for liaising with your creditors and distributing funds on your behalf.
• We can perform a confidential review of your circumstances to see whether you are eligible.
• A legal process for UK residents (excluding Scotland) with a significant debt problem.
  On agreement your creditors accept a reduced offer of repayment in full and final settlement of the debt.
• Payments are normally made over a 5 year period, following which the remainder of your debt is written off.
   

Bankruptcy

Recent changes in the legislation covering bankruptcy laws have led to an increasing number of people choosing this option.

The period of bankruptcy now usually lasts for a period of 12 months instead of the previous two or three years. However the restrictions on obtaining credit, being a company director or working in certain professions still remain. Most people who have a regular income will also be required to make monthly payments towards their debts based on what the Official Receiver thinks they can afford.

If you own a property or other assets the Official Receiver will require you to give them up to pay back the money you owe. In relation to your home this could happen up to three years after the date of your bankruptcy if the official receiver thinks it is necessary.

Bankruptcy is a legal process resulting in a 'Bankruptcy Order'. Once an order has been processed it is very costly and difficult to get the order reversed. Anyone can go bankrupt, including individual members of a partnership. Once ordered, a trustee will oversee your finances and any further interest and charges will be frozen.

A bankruptcy order can still be made by your creditors even if you refuse to acknowledge or agree to the proceedings. If made bankrupt, it is in your best interests to co-operate fully with your trustee, who will make a full investigation into your finances.