Individual Voluntary Arrangement (IVA)

An IVA (Individual Voluntary Arrangement) is a legally binding agreement between you and your creditors to pay back your debts over a period of time.

If most creditors agree to your IVA proposal and it is accepted, you must agree to make regular payment contributions to an insolvency practitioner who will administer the IVA for both you and your creditors, and they will fairly divide your payment contributions between your creditors.

An IVA can give you more control of your assets than bankruptcy.

Key features:

• It is affordable. Your monthly IVA repayments will depend on your specific income and outgoings, meaning it will be an amount you can afford each month.
• After successful completion of your IVA, any remaining debt is written off.
• Protected Legally – If your IVA application is approved, creditors can take no further action, and all interest and charges are frozen.
• Fees charged are deducted from the monthly IVA payment you make over the agreed term of the IVA.
• Your expenditure will be reviewed at the start and annually to ensure your payment remains affordable.
• There are guidelines on the expenditure of a person who enters an IVA.

Considerations:

•  Creditors do not have to agree to an IVA proposal, so your application is not guaranteed to be accepted.
• It affects your credit file for six years.
• Your information will be held on the public insolvency register
• There are costs involved with an IVA. However, costs are deducted from the contributions you make. These will be fully explained to you and detailed fully in your IVA proposal
• If you own a property, you may be asked to release equity from the value to pay off debts. A remortgage may attract higher rates of interest, or if no remortgage is available, an IVA may be extended by 12 months.
• If your IVA fails, it may result in Bankruptcy.
• If you earn additional income, then a percentage of this may need to be paid into the IVA.
• Only unsecured debts can be included within the IVA.
• Borrowing any amount over £500 can only be done with the express permission of the Insolvency Practitioner.

Check your eligibility for an Individual Voluntary Arrangement (IVA) by clicking on the ‘Eligibility Check’ link below:

Eligibility Check

Debt Relief Order (DRO)

Debt Relief Orders (DRO) are formal debt solutions for people with little or no assets and low income.

If you do not own your own home & have little spare income and debts that are less than £30,000 a Debt Relief Order (DRO) could be a way to deal with your debts.

It is an alternative debt solution to Bankruptcy or an Individual Voluntary Arrangement and is available to residents of England, Wales, and Northern Ireland.

Key features:

• Your debts will be written off at the end of the DRO. This is typically one year from approval.
• None of the creditors listed in the DRO application can take further action against you without the court’s permission.
• It allows you to make a fresh start after one year.
• The fee (£90) is affordable and can be paid in instalments, but the fee must be paid before the application can be made.
• The approved intermediary ensures that you are given appropriate advice and fit the DRO criteria.

Considerations:

• Your credit rating will be affected for six years.
• Owning property or having assets over £2,000 will stop you from entering a Debt Relief Order
• A Debt Relief Order may be cancelled if you do not comply or if your circumstances change during the 12-month period, for example, if you are able to make payments towards your debt(s)
• Entering a DRO will be recorded on a public register
• If you can afford more than £75 after your monthly essentials have been budgeted for, then you will not qualify

Check your eligibility for a Debt Relief Order (DRO) by clicking on the ‘Eligibility Check’ link below:

Eligibility Check

Debt Management Plan (DMP)

A Debt Management Plan is an informal repayment agreement between you and your creditors to pay your debts.

Debt management plans are an alternative debt solution to formal, legally binding arrangements, such as an Individual Voluntary Arrangement (IVA) or Bankruptcy. They are available to residents in England, Wales, and Northern Ireland.

Debt management plans are typically used under the following circumstances:

• You can afford to pay an amount towards creditors each month, repaying your debts in full within a reasonable timeframe.
• You have problems with debt but will have the ability to make repayments within several months.
• You can organise a payment plan with your creditors yourself, use a licensed debt management company (fees are charged), or use the free sector.
• Payments are made regularly to the company.
• The company divides the money between all your creditors.

Key Features:

• You only pay one affordable payment to the DMP company.
• The payment is flexible depending on your circumstances; it can increase or decrease.
• Payments can be reduced & creditors can freeze interest rates; however, they are not obliged to do this.
• Some charities & organisations provide this service free of charge (you can contact the Money Advice Service for more information).
• Avoids the need for a Formal Insolvency Procedure.

Considerations:

• All the creditors must agree to the arrangement for the Debt Management Plan to be effective.
• Interest & charges are not guaranteed to be frozen.
• Your credit rating is affected as your monthly payments are not contractual.
• Debt management plans can affect your credit file for a minimum of 6 years, as in most cases, you will default on the original credit agreement terms once you enter the arrangement.

Check your eligibility for a Debt Management Plan (DMP) by clicking on the ‘Eligibility Check’ link below:

Eligibility Check

Administration Order

An Administration Order is a repayment plan arranged by the County Court and is only available in England, Wales, and Northern Ireland.

An Administration Order legally binds your creditors and protects you from them.

The creditors included in the order cannot contact you for payment or add any more interest or charges to your debts once the administration order has been approved.

To apply for an Administration Order, you need to have:

• less than £5,000 debt in total.
• received at least one court judgment.

Key features:

• There is no upfront cost to you.
• You make just one monthly payment to court.
• Your home is not at risk.

Considerations:

• The debt must be below £5,000.
• You may have to sell valuable possessions.
• Your details are recorded on a Public Register.
• Your credit rating will be adversely affected.
• The order will be listed on a public insolvency register.

Check your eligibility for an Administration Order by clicking on the ‘Eligibility Check’ link below:

Eligibility Check

Breathing Space

Breathing Space is a new debt option that gives you temporary protection from the creditors you owe money to if you are struggling with debts.

Key features:

• Freezing most interest and charges on debts.
• Pausing most enforcement action and contact from creditors.

There are two types of Breathing Space:

• Standard Breathing Space – which you apply for through debt advice and lasts up to 60 days, with a review between days 25 and 35.
• Mental Health Crisis Breathing Space – which is specifically for people in mental health crisis treatment and can only be applied for with an Approved Mental Health Professional (AMPH). It lasts for the duration of your treatment, plus 30 days.

Check your eligibility for Breathing Space by clicking on the ‘Eligibility Check’ link below:

Eligibility Check