If you find are able to pay off more than you have agreed, then we will be able to arrange an alternative payment plan.
Yes, you will be able to get a debt management plan if you have any existing CCJ’s, and might be able to use the plan to make repayments.
A DMP is not a legal procedure, so there is no guarantee that your creditors will accept. But if the agreement is beneficial to both parties then it is likely to be accepted.
A DMP will mean that you will be breaking the terms and conditions of your creditor agreement, meaning it will have an adverse affect on your credit record. However if you are failing to make your monthly payments then your credit rating will be poor.
If you fail to keep up repayments then your creditors will no longer wish to continue to support you and may withdraw their help. If you are struggling to make your payment, talk to your case handler who will advise you on what to do.
Your initial payment will go towards the costs of setting up the programme and negotiating with your creditors. We then have an ongoing administration cost which is included as part of your monthly payment.
You will have to make payments until your unsecured debts have been repaid in full.
Your residential status is not considered when applying for a DMP. As long as you have a surplus of income then it does not matter about your employment status.
Most likely but it is important to remember that you will be paying a smaller monthly payment in the longer run, instead of struggling now. It is possible that creditors will freeze interest on your account so you can pay your debt off at a quicker rate.
As we are not lending you any money then we will not need to perform a credit check on you.
It should include most of your existing creditors, but there are those which cannot be included. These are known as “priority debts”, meaning that if they are not paid then there will be serious consequences.
The amount you pay is dependant on your circumstances. You must keep up regular monthly payments so your creditors will not feel the need to cancel your agreements. This is why we will work out a individual payment plan based on your exact earnings and expenditure.
Your payments are proportioned on how much each creditor is owed. You will receive a statement showing how much each one is issued. You will receive a quarterly statement showing each transaction that has been made from us.
No, it is not a loan but a way of consolidating all your repayments into one low cost payment without any further borrowing.
Providing that all the terms of your proposal have been fully carried out, then your creditors will have no further claim against you meaning that any outstanding debts will be written off.
For an IVA you will probably have three or more creditors.
We will detail your household income (take-home pay and benefits) and expenditure (i.e. food, utility bills and secured lending). By deducting your expenditure from your income you are left with an amount (often called ‘‘Disposable’ income) which is all you have left to pay off your unsecured debts. In the example below, you can expect to pay a monthly contribution of £250 to repay your unsecured creditors. through your IVA.
| Monthly Income | Monthly Expenditure | ||
| Your take home pay (inc. overtime) | £1,200 | Mortgage/Rent | £700 |
| Partner’s take home pay | £690 | Council Tax | £100 |
| Other income (Benefits, maintenance etc) | £100 | Water/Gas/Oil/ Electricity/Phone/Mobile | £100 |
| Food/Household/Clothing | £600 | ||
| Car Expenses/Finance | £190 | ||
| TV Lisence/Rental/Sky | £30 | ||
| Public Transport | £20 | ||
| Total household income | £1,990 | Public household expenditure | £1,740 |
| Monthly Disposable Income | £250 | ||
Each case is different and depends on your circumstances. No doubt you have heard of IVA cases where up to 80% of the debt is written off, these are very exceptional cases as the avaerage amount is around 60%.
Example of Debt Write Off:
| Your Unsecured Debts | £30,000 | |
| Contracted monthly payment | £750 | |
| Disposable Income | £250 | (from the above example) |
| Number of months in your IVA | 60 | |
| Contributions into your IVA | £15,000 | (£250/month x £15,000) |
| Debt Written Off | £15,000 | (£30,000 - £15,000) |
| Debt Written Off | 50% | (£15,000 / £30,000) |
Your landlord does not need to know about your IVA as long as your rent payments are kept up to date.
If your circumstances change within the duration of your IVA then you must contact your I.P immediately. It is possible to modify your IVA to reflect this new financial change. If the problem is more of a short term nature, then emergency payments breaks can be taken. However if you miss any payments without permission then there is a strong chance that your creditors will commence bankruptcy proceedings against you.
Yes, but if you owe money to the bank where your salary is paid into, they could take all the funds that they receive, such as your wage! One of the many benefits of an IVA is that you can open a new ‘simple’ bank account with a bank that you do NOT owe money to. This ensures that you are remain in total control of your income.
Your IVA is a private legal agreement between you and your creditors alone. IVAs are not published in your local newspapers so you should not suffer from adverse publicity, but the information is avaliable on a government website.
Typically an IVA should lasts for 60 months.
IVA stands for Individual Voluntary Arrangement where you pay just one monthly amount to your creditors over a set period of 60 months. After your IVA any outstanding debt is written off. IVAs were introduced by the government as part of the Insolvency Act 1986, and are legally binding on all parties.
Applying for an IVA is a complicated legal process which can only be undertaken by a licensed I.P. The costs of setting up your IVA are quite high. Your creditors apply two simple rules in deciding whether or not to accept an IVA:
1: Where your unsecured debts are below £15,000 the cost of the IVA as a proportion of the debt is too high to be economically viable
2: Where the monthly payment is under £200, the high cost of running the IVA would take up to much of the money to make it economically viable.
No, your mortgage, and any other secured payments, will be prioritised, which means we will ensure that you repay them before your IVA contributions are made. Therefore your home is protected as long as you keep up those repayments.
An IVA is legally complex procedure and is therefore only allowed by law to be undertaken by licensed Insolvency Practitioners. If you act promptly to supply us with information then we should be able to process your application in no more thaan 6 weeks.
Yes. This is a complex matter but self employed people can undertake IVAs and small companies can do CVAs. If this applies to you then we will can discuss this in further detail with you.
As soon as your IVA proposal is prepared then the court will be notified, which should be sufficient to stop proceedings. If this does not happen then your advisor will write to both the court and your creditors.
No, an IVA is as legally binding process. So once it has been set up it cannot be cancelled.
Your proposal needs 75% of the creditors (by value of debt owed) to vote in favour. For example, if you owe £40,000, and every creditor voted, then you would require £30,001 of your creditor votes to be in favour of your IVA.
If the creditor (or group of creditors) that refuses your case is/are owed more than 25% of your debt then your IVA application has failed.
There is no exact figure that your creditors will ask for in making the decision whether to accept you IVA proposal. This is a two way decision that must be in interest of both you and your creditors.
Your creditors want to see that you are proposing a fair payment that is affordable and sustainable for the length of the IVA.
Your creditors will in turn agree to freeze interest and charges and also write off a large proportion of your debt. They will cease all recovery and legal activity, telephone calls and letters.
Yes but if you are missing monthly payments then your credit rating is already damaged. A poor credit rating will affect your ability to borrow more debt, but the last thing that you should be thinking about is borrowing more money, whether unsecured or secured.
If your creditors are chasing you before your IVA is accepted, then your I.P can apply to court for an ‘Interim Order’ which means your creditors cannot continue with recovery proceedings against you. The Order remains until your IVA proposal is proposed to your creditors.
When your IVA is in place, your creditors are not allowed to take any action against you. They are legally obliged to contact us, as we act as your legal representative. This might take a little time but within a few months you should not hear from your creditors again.
If you are struggling to meet your current monthly payments, then an IVA could be your best option. If you can answer yes to the following questions then an IVA could be for you.
We will do all the work for you so you don’t have to worry about a thing. Through a series of telephone meetings with you, we will prepare a detailed IVA proposal, which you approve and will be issued to your creditors. If they vote in favour of your IVA, it becomes a legally binding on your contract.
A licensed Insolvency Practitioner (I.P) is the only type of financial advisor that is seen as an ‘expert’ in insolvency procedures under law. They act as Administrators and Liquidators of companies. Some Insolvency Practitioners choose to provide their valuable expert service to help indebted individuals to solve their financial problems without having to borrow more money.
Yes. Once you apply for your IVA, your Insolvency Practitioner will notify the appropriate authorities. They will argue on your behalf that an IVA is in the best interest of all parties. If this is accepted then your Bankruptcy will be annulled once your IVA gets approved
Yes. If you wish to pay a lump sum into your IVA, then we can arrange a variation meeting with your creditors to offer your settlement figure.
Under normal circumstances this will not happen, but it may be that you inherit a large sum or win the lottery, called a ‘windfall’. There will be a ‘windfall’ clause built in your IVA contract that will require you to pay the money into your IVA. As your creditors have agreed to freeze write off a large proportion of your debt, it is only fair that you come to a new arrangement with them.
An IVA is a repayment plan which can only be done with unsecured debts. If you owe money which is secured against an asset, i.e. your home, and you fail to meet your contracted repayment obligations then your creditors can take various actions including forced sale of that asset. Therefore no deal can be done with secured debts.
This means that no further action can be taken against your account by your existing creditors.
The average Protected Trust Deed lasts for a period of 36 months.
Our advisors are here to help you with any alternative debt solution plans.
Secured debt works against the assets that you own, meaning that if you fail to keep up on repayments then these may be at risk, items include your home. Unsecured loans are not held against any items.
A Trust Deed will cover most of the debts that you have, but there are some which will not be written off. These include any secured debts such as mortgages, secured loans, student loans or fines.
We have tried to provide some more information on this website, but the best cause of action is to contact one of our advisors who will be able to talk you through the best options.
No, your Trust Deed has to be handled by a fully-trained Insolvency Practitioner (otherwise known as an I.P or Trustee).
No, it is a complex legal process that is agreed with your current creditors to repay your debts. No extra money is borrowed.
It is very important that you contact your IP immediately if your financial circumstances change for any reason. If you do not keep up your repayments then your creditors will start bankruptcy proceedings against you.
It is dependant on each individual case, and our expert advisors will help you through the process and come to the best decision.
We will detail your household income including your take-home pay and benefits and your expenditure. By deducting your expenditure from your income you are left with an amount, your ‘Disposable’ income, which is all you have left to pay back your unsecured debts. In the example below, we would expect you to make a monthly contribution to your Trust Deed of £250 to repay your unsecured creditors:
| Monthly Income | Monthly Expenditure | ||
| Your take home pay (inc. overtime) | £1,200 | Mortgage/Rent | £700 |
| Partner’s take home pay | £690 | Council Tax | £100 |
| Other income (Benefits, maintenance etc) | £100 | Water/Gas/Oil/ Electricity/Phone/Mobile | £100 |
| Food/Household/Clothing | £600 | ||
| Car Expenses/Finance | £190 | ||
| TV Lisence/Rental/Sky | £30 | ||
| Public Transport | £20 | ||
| Total household income | £1,990 | Public household expenditure | £1,740 |
| Monthly Disposable Income | £250 | ||
Yes, but don’t worry. If you are making monthly payments that are lower than the contracted amount or have missed payments then your credit rating will be damaged.
On average it should take about about six weeks to process.
In principle, a Protected Trust Deed is the Scottish equivalent of an IVA.
No, any interests or charges on your current debts will be frozen by your creditors from the commencement date of your Trust Deed.
You will be dealing directly with a licensed Insolvency Practitioner, who is the only type of financial advisor that is seen as an ‘expert’ under law. They are qualified to apply Insolvency Legislation and act as Administrators and Liquidators of companies. Some choose to provide their valuable service to help indebted individuals to sort out their financial problems without having to borrow more money.
You will not necessarily lose your house, but any equity will probably be released to help pay off your debts.
Bankruptcy is a legal process for those who can no longer afford to pay back their debts, this can be proposed to the court even if you owe as little as £750.
After the proposal has been accepted, a Bankruptcy Trustee is assigned to sell your assets and distribute the funds accordingly. Once this process starts, creditors can not process any further claims against your current debts.
There are a number of options to be considered before bankruptcy. This includes IVAs, which can write off a substantial proportion of your debt and you pay a monthly amount over 60 months. Debt Management Programmes may also be a suitable option.
For more details please call us free on 0808 131 9100, or fill in our online Quick Enquiry Form so we will call you back.
There are many implications connected with Bankruptcy which can be easily disregarded, as bankruptcy can be seen as the ‘easy’ way to write off your debts.
It has a strong social stigma attached, as all your details will be published in your local newspaper and available online. It will be very difficult to apply for future credit, and some career opportunities will be hindered.
Once your Bankruptcy Order is approved, all your assets will become the possession of your Trustee who has the authority to sell them to pay back some of your debts, which is done without your consent.
This means that you may lose high value assets such as jewellery and shares. You will only be able to keep basic household amenities and tools associated with your employment. You might be able to keep your car if it can be shown to be essential, but you might have to trade it in for something cheaper and hand over any surplus.
If the Trustee determines that you have a surplus monthly income, then can apply to court for an Income Payments Order which forces you to pay a monthly sum for 3 years.
Yes as your home may have to be sold to help pay off your debts.
It depends on the sector of your employment. If you are a member of a professional body then you may have to resign, but check your Terms of Employment which should detail more information.
Although bankruptcy clears off most of your debts, there are still those which are not written off, including:
Bankruptcy ensures all your creditors will all get paid fairly, although this happens in acertain order in:
If you petition for your own bankruptcy then you will have to pay a £150 court fee and a £355 deposit towards the Official Receivers.
No, all your bank accounts will be closed and any money will go towards paying your creditors. You will only be allowed to open a new bank account with permission from your Trustee. With a joint bank account then half of the account funds will be taken.
Yes, your details are placed within the public domain on the bankruptcy register as well as being published in your local newspaper. Anyone you are financially connectied with, such as your mortgage company, will also be notified
Yes, there is a process which releases you from the bankruptcy order.
Once your order has come to County Court, you will be given a hearing date which you must attend. This will involve a number of detailed analyses regarding your financial status, ending with a decision on whether or not your bankruptcy will be granted.
If you have not been declared bankrupt before, then the average period is 12 months.
Yes, however the minimum bankruptcy discharge period will then be 5 years, and may continue for 15 or more. It is much better to look into alternatives before you declare yourself bankrupt again.
Yes, unfortunately your Trustee will have the ability to take your home no matter what your personal status, unless your partner can purchase your share of the equity.
Any pension payments during your bankruptcy order will be considered as an income meaning that they will be paid to the Trustee.