Getting Out Of Debt
Formal debt solutions can help you
Debt Relief Order (DRO)
– Debt-Free after 12 Months –
100% of Unsecured Debt Written Off
No Monthly Repayments
Stop Creditors Chasing you
Debts written off after 12 months
£90 Receiver Fee to be paid
DRO Added to Individual Insolvency Register
Criteria based, not suitable to everybody
Credit rating will be negatively impacted
Individual Voluntary Arrangement (IVA)
– Reduce Monthly Payments –
Achieve unsecured debt write off
Lower Single Monthly Repayments
Stop creditors chasing you
Your IVA needs to be approved by your creditors
IVA Added to Individual Insolvency Register
Credit rating will be negatively impacted
There are fees and charges payable within an IVA.
Solutions may not be suitable in all circumstances. We advise on what options fit your criteria. Your credit rating may be affected. Fees apply on successful applications which will be advised and built into your payment plan.
We specialise in providing Individual Voluntary Arrangements (IVA’s). As part of our service we will provide information on and assess your suitability for a range of solutions; and should you not wish to proceed with an IVA then we will refer you to a trusted partner
You could include the following debts:
A formal debt solution may:
☑ Stop creditors contacting you
☑ Get unaffordable debts written off
☑ Reduce monthly repayments
☑ Freeze further interest and charges
We will generally ask you a few questions and advise you on what options are available to you with some short videos to explain them in more detail.
May not be 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
More details on Debt Solutions
Debt Relief Order
Debt-Free after 12 Months
If a DRO is successful all you need to pay is the £90 up front fee
Your debts will be written off after 12 months, provided you continue to meet the DRO qualifying criteria.
You are legally protected with a Debt Relief Order.
There is a one off 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.
A DRO will remain on your credit file for 6 years from the date it is approved.
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.
How does a DRO work?
Your personal debt circumstances will be assessed by an advisor, including your total assets and your disposable income.
You will only qualify for a DRO if all of the following apply:
- You have a monthly disposable income of £75 or less
- Your assets are worth no more than £2,000
- If you own a vehicle, it is valued at no more than £2,000
- Your unsecured debt level is no more than £30,000
If you are applying for a DRO, your application will need to be submitted through an ‘Approved Intermediary’; which is a company registered with the Insolvency Service to provide the solution.
There is an upfront, one-off fee of £90.
A DRO is in place for 12 months during which time, you are not expected to make payments on your unsecured debts. You are legally protected against your creditors who will not be able to take any action against you during this time.
Providing you continue to meet the qualifying criteria, a DRO is complete after 12 months and all debts that were included in it will be written off.
A DRO is only available in England and Wales.
Debt Management Plan (DMP)
When you make a payment towards your Debt Management Plan it is distributed between your creditors on a pro-rata basis on your behalf.
Most contact from creditors will be dealt with by the Debt Management company on your behalf.
Creditors may agree to reduce or freeze interest and charges, although this is not guaranteed.
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.
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.
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.
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.
Creditors can choose to continue with their debt collection process, which can lead to further action such as a default or County Court Judgement.
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 company will complete an assessment of your income and expenditure to calculate your affordable monthly repayment. They will also need a full list of your creditors and how much you owe to them.
A debt management provider can either be a debt charity or a fee charging company. If you choose to use a fee charging company, there will usually be set up fees and a monthly management fee which will be included within your monthly repayment. The remaining funds are then distributed amongst your creditors on a ‘pro-rata’ basis which means that the creditors you owe the most to, receive the biggest proportion of the payment.
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.
Once approved, creditors can no longer proceed with legal action against you.
The Official Receiver will deal with your creditors on your behalf so you no longer have to
Unlike a DRO there is no strict qualifying criteria that you need to meet before you can apply.
Interest and charges are frozen once the bankruptcy application has been approved.
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 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
You could be asked to make payments towards your debts for a period of up to 3 years.
Bankruptcy will be recorded and have a negative impact on your credit file for a period of 6 years.
Your personal details will be recorded on the Insolvency Register which is a public record.
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.
If you live in England or Wales, declaring bankruptcy is a way for you to deal with unmanageable debts. Bankruptcy is a formal, legal procedure where you apply to write off your debts.
How does Bankruptcy work?
Before being declared bankrupt there is an upfront cost payable of £680. This is payable in instalments although your application will not be processed until the full fee is paid.
You must submit an application online via https://www.gov.uk/apply-for-bankruptcy. You will be required to include information about your income, expenditure, debts and assets. Your application will be reviewed by an adjudicator, and you will be notified if the bankruptcy order has been granted. If successful, the Official Receiver (an officer of court who manages your bankruptcy) will be appointed and will contact you to advise on the next steps required, which could include you having to complete a questionnaire or attend an interview.
If you have any assets which can be sold, you may be requested by the Official Receiver to do so in order to pay your creditors. They may also request for you to make contributory payments (this could be for a period of up to 3 years). Your previous financial dealings will be assessed, and this will include the disposal of any significant assets in previous years. If it is determined that your previous actions may have contributed to the bankruptcy, the Official Receiver can put restrictions in place that can last from 2 to 15 years.
In most cases you will be automatically discharged from Bankruptcy after 12 months.