Debt Solutions | Restructuring | Services
The debt solutions are as follows:
- Individual Voluntary Arrangement (IFA)
- Debt management plan
- Debt Relief Order (DRO)
- Bankruptcy
- Informal arrangement
1. Individual Voluntary Arrangement
- Legally binding agreement between you and your creditors
- Prevents further legal action against you by creditors
- Avoid the stigma and restrictions of bankruptcy
- Offer to pay an affordable monthly amount (within guidelines) for up to five years
- Interest and fees on unsecured debt are frozen
- You may be able to keep your house
- You may be able to continue your activity
- Your IVA will be approved by creditors if more than 75% vote for acceptance
- Once the duration of your arrangement has been successfully completed, the balance of your debts will be written off
2. Debt management plan
- Informal agreement negotiated with creditors
- Monthly management fees
- A reduced monthly payment
- Longer repayment term
- Interest and fees may or may not be frozen
- Not legally binding
- Suitable for lower debt levels (
- Must have disposable income
3. Debt relief order
Similar to bankruptcy but suitable if you:
- You owe less than £15,000 in total to your creditors
- Own assets worth less than £300 (excluding a motor vehicle worth £1,000)
- Have less than £50 per month of disposable income
- The DRO will last 12 months
- The cost to apply is £90
- You must not have had a previous DRO within six years
4. Bankruptcy
- Court process where a bankruptcy order is made
- Appointed trustee to control your assets and look after your estate
- Interest and fees are frozen on unsecured debt – direct payments cease
- Ownership of your assets passes to the trustee (including your home)
- Assets will be sold to raise funds to pay your creditors
- If you have disposable income per month, you may need to make payments for up to three years
- Bankruptcy can have an impact on your profession if you are, for example, a business manager, an accountant, a lawyer, etc.
- Your bankruptcy may be advertised in the local newspaper
- Bankruptcy usually lasts 12 months
- The cost of a petition for your own bankruptcy is around £500
