In order to determine what solution is the best option for you, we will need to conduct an assessment of your current circumstances, including your income and expenses. To make the assessment as straightforward as possible, we recommend getting together details of your income (i.e. any benefits you receive, a monthly/weekly salary), details of what you owe to which companies, and your regular expenses. For your expenses, you can use your bank statements for the last three months to calculate what you’re paying for items like:
– utility bills
– travel costs
– food and toiletries
If you can’t get this altogether before we speak to you, don’t worry! If you’re not sure on anything, our specialist friendly team will be happy to help.
If you know who you owe money to, you can contact creditors for up-to-date debt balances. If you’re unsure, you can get a copy of your credit report from one of three credit reference agencies:
- TransUnion (formerly Call Credit)
Absolutely, yes we can. Then please call us now 01925320853.
If you’re insolvent and can’t afford to repay your debts in a reasonable time, some of the debt solutions available might require you to sell your home, remortgage or release some of the equity, depending on your individual situation.
However, during your debt advice session you’ll be told about the risks associated with each available debt solution, so you can make an informed choice that’s right for your situation.
A DMP may be a suitable debt solution if you have some surplus money available each month once you’ve paid your priority costs such as rent or mortgage, food, accommodation and utility bills.
We’ll work with you to work out a budget that meets your household’s needs. Any money left over will go to your creditors.
A debt management plan will almost always affect your credit file and score. This is because you usually pay less than the minimum repayment amount you agreed to when you initially took the debts out.
A DMP isn’t specifically registered on your credit file but the reduced payments could impact on a few different areas of your credit file. Details of court action, defaults or missed payments will be removed six years from the date it happened, even if the debt hasn’t been fully repaid.
If you’re unable to keep up with payments to most credit facilities, you should be able to include these in your DMP. This includes credit cards, loans, overdrafts, catalogue accounts, payday loans and xxx. In some circumstances, you may also be able to include any arrears where you’ve fallen behind on your household bills, such as utility bills, Council Tax or your rent.
If a debt cannot be included in the DMP for any reason (e.g. it’s a secured debt), we will include the amount you need to pay to the account in your monthly budget to make sure you can keep up with your payments.
Debt consolidation involves taking out a loan to repay all unsecured debts you may have. Usually the loan would be paid back over a longer period than the debts it was taken out to repay, therefore lowering the monthly payments. However, interest is usually charged.
A debt management plan doesn’t involve taking further credit. Instead, new payment terms are agreed with your creditor, based on what you can afford to pay.
If you have a lump sum to pay towards your debts, you may also qualify for an IVA.
An IVA should be carefully considered because of the possible consequences for your personal, professional and financial life. There are several risks that you must consider before applying which is why you should get expert debt advice.
IVA’s are a type of insolvency and will show on your credit file for six years from the date they begin. During this time, you’re likely to find it difficult to obtain credit. You must also inform your insolvency practitioner (IP) and get written permission if you want to take out more than £500 worth of credit during your IVA. Details of individual voluntary arrangements are listed on a public register called the Individual Insolvency Register. It’s unlikely that anyone would come across this information, but it’s something which is available to those who know where to look for it.
Other IVA companies may charge different fees. It’s important to check and understand them before going ahead.
Some jobs could be affected if you’re on an IVA, for example:
- Company directors
- Law and property roles
- Finance and accountancy roles
- Pub licensees
The best way to find out if an IVA or bankruptcy would impact on your job is to check with your professional membership body or trade union or ask to speak to your HR department confidentially. It’s important to check if your job will be affected, but in our experience most jobs are not.
DROs are specifically designed for people who have a smaller amount of debts and a lower income, and can be a cheaper alternative to bankruptcy. To apply for a DRO, you must:
- live in England, Wales or Northern Ireland
- owe less than £20,000
- have less than £1,000 in assets (and a car worth no more than £1,000)
- have less than £50 in surplus income per month after paying your household bills and living costs
A debt relief order will stay on your credit file for six years from the date it’s approved. This may make it difficult to take out credit during this time.