Skip to main content

Stop creditors contacting you

 Unaffordable debts are written off

 Consolidate repayments

Interest and charges freeze

Legal protection against creditors

Use our Fact Finder and start getting help today…

Check your options
Not all solutions are suitable in all circumstances. Your credit rating may be affected. Fees apply on successful applications which will be advised and built into your payment plan.

Fact Finder

Our expertise lies in guiding clients through Individual Voluntary Arrangements (IVAs). Our comprehensive services include offering insights and evaluating your compatibility with various options. If you decide against pursuing an IVA, we are equipped to connect you with a reliable partner for alternative solutions.

Money Helper (formerly The Money Advice Service) is a free service set up by the Government to help people make the most of their money. If you would like to learn more click here.

Money Helper

Advantages and Disadvantages of Debt Solutions

Debt Relief Order

Debt-free after 12 months

DRO Benefits

You have No Monthly repayments

100% of unsecured debt Written Off

You are Legally Protected

DRO Disadvantages

There is an official receivers fee of £90 which your debt advisor will tell you how to pay. 

Your DRO will be added to the individual insolvency register. This will be removed 3 months after the DRO end period.

Strict qualifying criteria:

You must have no more than £75 per month left after essential expenditure (excluding creditor payments)

Must not owe more than £30,000 in unsecured debt

Not available to homeowners or those with assets or a vehicle, worth over £2,000.

IVA

Will protect your assets

IVA Benefits

Monthly Repayments You Can Afford

All of your remaining unaffordable, unsecured debt be Written Off

You are Legally Protected

IVA Disadvantages

It will be on your credit file for 6 years

You cannot take out credit worth over £500 whilst on the IVA, without the consent of the Insolvency Practitioner

The IVA is recorded on a public register

There are fees and charges payable within an IVA solution. These are agreed upon with your creditors as part of the proposal. The fees are incorporated into your affordable monthly payment.

Debts you can include

Check your options

Understanding the solutions

Individual Voluntary Arrangements (IVA)

IVA Advantages
One affordable monthly payment
All of your necessary living costs will be taken into account before an IVA payment plan is agreed.
Stop interest and charges

Whilst subject to an approved IVA, any interest and / or charges are frozen. These can’t and won’t be added to your debts by your creditors, preventing the debt amount from increasing.

Write off a significant percentage of your debt

Typically, an IVA lasts for five years. Provided your agreement is adhered to, your remaining unsecured debt will be written off.

Protect your home and vehicle
Essential assets such as your home or vehicle are usually protected during an IVA. You may retain these, provided they are of a reasonable value.
Stop worrying calls and letters from your creditors

Once your IVA has been accepted by creditors, they are bound, by law, to no longer contact you requesting payment directly. The IVA provider will deal with creditors on your behalf.

Stop court and bailiff action
Provided you are sticking to your IVA terms, creditors are not entitled to take any legal action against you – including sending bailiffs to visit you.
IVA Disadvantages
Requires creditor agreement

A high proportion of IVAs proposed are accepted however your creditors don’t have to agree to an IVA, and therefore we can’t guarantee it.

An Insolvency Practitioner will only propose an IVA on your behalf if they believe there is a good chance of it being approved.

Keeping to a budget

The regular monthly repayment that an IVA requires you to commit to, will mean that you need to manage finances within a budget. If you’re not used to doing this, you might find this difficult.

It will affect your Credit Score

An IVA will remain on your credit file for 6 years from the date it is approved, or until your IVA is finished. If your IVA runs for 5 years, it will remain visible for a further 12 months from the date of completion

IVA Added to Individual Insolvency Register

Your IVA will be added to the Individual Insolvency Register. This will be removed 3 months after the IVA completes.

You pay fees to your IVA company

The fees that are paid in an IVA are typically built into your affordable monthly repayment

Approval required for further credit

You are unable to take any credit of £500 or over without gaining the explicit consent of your IVA Supervisor.

About IVA’s 

An Individual Voluntary Arrangement (IVA) is a legally binding agreement made between you and your creditors to pay back an affordable portion of their debt over a set period. 

An Individual Voluntary Arrangement (IVA) facilitates a manageable monthly payment over a predetermined duration, typically five years. Your appointed Insolvency Practitioner (IP) manages the distribution of these payments to your creditors.

IVAs are initiated and managed by a certified Insolvency Practitioner. This professional will engage in a comprehensive discussion with you to grasp your financial situation. Following this, the IP assists in crafting a ‘Proposal’ – a formal document presented to your creditors. This proposal provides a clear picture of your financial standing and proposes a reasonable repayment plan for your creditors’ consideration.

Your creditors will then have the opportunity to vote on accepting this proposal. To move forward with the IVA, it requires the approval of 75% (by value) of the creditors who vote.

The payments you make also include fees for administering the IVA. These fees, outlined in your IVA proposal, are pre-approved by your creditors and are not additional charges but are part of your monthly payments.

Successfully completing your IVA results in the discharge of any remaining unsecured debts.

It’s important to note that IVAs are available only in England, Wales, and Northern Ireland.

Check Your Options

Debt Relief Order

Debt-Free after 12 Months

DRO Benefits
No Monthly Repayments

If a DRO is successful all you need to pay is the £90 up front fee

100% of Unsecured Debt Written Off

Your debts will be written off after 12 months, provided you continue to meet the DRO qualifying criteria.

Legal Protection from Creditors

You are legally protected with a Debt Relief Order.

DRO Disadvantages
£90 Receivers Fee

There is a one off official receivers fee of £90 which your debt advisor will tell you how to pay.

DRO Added To Individual Insolvency Register

Your DRO will be added to the individual insolvency register. This will be removed 3 months after the DRO end period. 

It will affect your credit score

A DRO will remain on your credit file for 6 years from the date it is approved.

Check Your Options

About DROs (Debt Relief Order)?

A DRO or Debt Relief Order is a formal debt solution that lasts 12 months. A DRO is only available subject to strict criteria being met. We recommend people consider their eligibility for a DRO before applying for an IVA.

An advisor will evaluate your personal debt situation, considering both your total assets and disposable income.

Eligibility for a Debt Relief Order (DRO) hinges on the following criteria:

– Your disposable income per month must not exceed £75.
– The total value of your assets should be £2,000 or less.
– If you own a vehicle, its value should be no more than £2,000.
– Your unsecured debt should not surpass £30,000.

For applying for a DRO, you must proceed through an ‘Approved Intermediary,’ a firm authorized by the Insolvency Service to facilitate this solution.

The process involves a one-time fee of £90.

Once a DRO is in effect, it lasts for 12 months. During this period, you are not required to make payments towards your unsecured debts. Moreover, you’ll be legally shielded from any creditor actions.

If you continue to meet the DRO criteria throughout these 12 months, the order will be considered complete, and all included debts will be discharged.

Note that DROs are applicable only in England and Wales.

Debt Management Plan (DMP)

DMP Advantages
One affordable monthly repayment

When you make a payment towards your Debt Management Plan it is distributed between your creditors on a pro-rata basis on your behalf.

You no longer have to deal with creditors directly

Most contact from creditors will be dealt with by the Debt Management company on your behalf.

Interest and charges may be stopped

Creditors may agree to reduce or freeze interest and charges, although this is not guaranteed.

Flexible informal solution

A DMP can be a useful temporary measure when you are struggling to pay your creditors due to a short-term change in circumstances. It is less restrictive than other, formal debt solutions.

DMP Disadvantages
An informal solution with no debt forgiveness

Unlike other formal solutions (such as DRO, IVA or Bankruptcy), it is likely a DMP requires full repayment of your debts and could potentially be a longer term solution.

The length of the DMP is not fixed

How long the plan will last will be determined by the monthly amount you pay, the total amount of money you owe to creditors, whether your creditors agree to stop interest and charges, and whether your DMP provider charges a fee.

Your credit score may be affected

A Debt Management Plan is likely to have a negative impact on your credit rating, making it more difficult to obtain credit in the future.

No Legal Protection

Creditors can choose to continue with their debt collection process, which can lead to further action such as a default or County Court Judgement.

About DMP’s

A Debt Management Plan (DMP) is an informal agreement between you and your creditors that has been negotiated, usually by a third party, to lower the monthly payments being paid to your creditors.

How does a DMP work?

A debt management firm conducts a thorough analysis of your income and expenses to determine a feasible monthly payment amount. They also require a comprehensive list of your creditors and the respective amounts owed to them.

There are two types of debt management providers: non-profit debt charities and fee-based companies. Opting for a fee-based company typically involves initial setup fees and a recurring monthly management fee, which are incorporated into your monthly payment. The balance is then proportionally allocated among your creditors on a ‘pro-rata’ basis, ensuring that those to whom you owe more receive a larger share of the payment.

Check Your Options

Bankruptcy

Bankruptcy Advantages
You could be debt free after 12 months

You are automatically discharged after 12 months. There may be occasions where a Bankruptcy lasts longer than 12 months, if this is necessary it will be explained to you by your Trustee.

Legal Protection

Once approved, creditors can no longer proceed with legal action against you.

No longer dealing with your creditors

The Official Receiver will deal with your creditors on your behalf so you no longer have to

Available to everyone

Unlike a DRO there is no strict qualifying criteria that you need to meet before you can apply.

Interest & Charges

Interest and charges are frozen once the bankruptcy application has been approved.

Bankruptcy disadvantages
Lose control of assets

If you own a home or possessions of significant value, these items could be sold to help repay your debts.

You will be allowed to keep everyday household items and tools required for your employment.

There is a fee to pay before you apply

There is an application fee of £680, although this can be paid in installments.

The fee needs to be paid in full before your application can be submitted. There are additional fees that are involved if you have any assets that are sold as part of the bankruptcy

Payments from your income

You could be asked to make payments towards your debts for a period of up to 3 years.

It will affect your credit score

Bankruptcy will be recorded and have a negative impact on your credit file for a period of 6 years.

Bankruptcy added to Individual Insolvency Register

Your personal details will be recorded on the Insolvency Register which is a public record.

Affect on employment

Bankruptcy may impact your employment; therefore, you should always check the terms of your employment contract before making an application. You are also unable to be a company director unless you have permission from the court.

About Bankruptcy

In England and Wales, bankruptcy serves as a method to address overwhelming debts. It is a formal legal process designed to eliminate your debts.

Understanding the Bankruptcy Process:

An initial fee of £680 is required before you can declare bankruptcy. While you can pay this amount in installments, your application won’t be processed until the full fee is paid.

To initiate bankruptcy, you must apply online at [the official government website](https://www.gov.uk/apply-for-bankruptcy). This application requires detailed information about your income, expenses, debts, and assets. An adjudicator will review your application and inform you if the bankruptcy order is approved. Upon approval, the Official Receiver (a court officer who oversees your bankruptcy) will be assigned to guide you through subsequent steps, which may include filling out a questionnaire or attending an interview.

Should you possess any sellable assets, the Official Receiver might ask you to liquidate them to repay creditors. They may also require you to make additional payments for up to three years. An examination of your past financial transactions will be conducted, focusing on any significant asset disposals in recent years. If your past actions are found to have contributed to the bankruptcy, the Official Receiver has the authority to impose restrictions lasting between 2 and 15 years.

Typically, discharge from bankruptcy occurs automatically after 12 months.

Check Your Options