Step 1 - Identify The Problem
If you find that you are unable to make the full repayments to your creditors or, alternatively, you make the repayments and then don't have enough money to live, now is the time to address the situation.
Once you have accepted that you have a debt problem, you should feel easier about dealing with it.
Step 2 - Income & Expenditure
The next step is to assess your income and expenditure. You can complete our on-line form and we will calculate how much money you have left after essential expenses and will be pleased to help you with a debt solution.
Step 3 - Debt Solutions
There are debt solutions available for most debt cases.
Debt Management Plans
A Debt Management Plan can be used to resolve any problems that you may have with your unsecured debts. It is an informal arrangement suitable for people who do not have significant debts, who may not have very high disposable incomes or who expect that there circumstances may change in the future.
Informal Arrangements
An informal arrangement is an agreement with your creditors to repay your debt at a reduced amount. This may be because your are experiencing financial difficulties for various reasons. These types of arrangement are not court ordered but are still a form of agreement.
IVA
An Individual Voluntary Arrangement (IVA) is a legal process by which you can gain protection from your unsecured creditors by entering into a legally binding repayment agreement with them which is supervised by a licensed Insolvency Practitioner.
Debt Consolidation Loan
If you find that you are unable to meet your monthly repayments to your creditors, one option is to apply for a debt consolidation loan. The principle behind these is fairly simple - you borrow a large lump sum to repay your creditors and are then left with one creditor and one monthly repayment. This monthly repayment may be lower than the sum you are currently paying, however, you will continue making the repayments for a much longer period.
Bankruptcy
Bankruptcy is seen as the last resort. Perceived to be the only way to escape the ever-constant demands for payment by bill collectors and credit companies alike.
But bankruptcy is not something that should be rushed in to. Certainly there are times when it can be very useful, but there are other times when declaring bankruptcy would be a monumental mistake.
The constraints which are put upon you once you are declared bankrupt make it only a viable option in the most extreme of cases. It is more likely that an IVA will be the answer to severe debt problems, since it provides much of the relief offered by bankruptcy but without the severe constraints which bankruptcy imposes.
Court Administration Order An Administration Order is a court order which covers your outstanding debts. Under it you would make a monthly payment to the court, who will then distribute that money on a pro rata basis amongst your creditors.
For administering the order, the court will take 10% of your payment as handling fees to cover their costs, which they will deduct directly from your monthly payments.
Whilst the order is in place no creditor included in the order, without the leave of the court, will be allowed to take action against you. In addition, debt collection procedures and letters against you will be stopped.
Protected Trust Deed
A Protected Trust Deed is a formal arrangement based on a proposal by a debtor to his creditors to clear his debt.
Protected Trust Deeds are applicable to individuals living in Scotland, and are the Scottish equivalent to an Individual Voluntary Arrangement (IVA). They are regulated by The Bankruptcy (Scotland) Act 1985.
|
