Making Your Future a Success

1. Consolidation: One affordable monthly payment covers all your debts.
2. Frozen Charges: Interest and charges are frozen once the IVA is in place.
3. Creditor Communication: Your Insolvency Practitioner handles all communication with creditors.
4. Legal Protection: Creditors cannot pursue further legal action during the IVA.
5. Fixed Term: The IVA typically lasts for five years, and any remaining debt is written off.

1. Credit Rating Impact: An IVA stays on your credit report for six years, affecting your credit rating and future access to credit.
2. Legally Binding: An IVA is a strict contract with limited flexibility.
3. Income Adjustments: If your financial situation improves, you might be required to increase your payments accordingly.
4. Fees: Administrative fees charged by the Insolvency Practitioner are included in your monthly repayment plan.
5. Expenditure Monitoring: Your expenses might be reviewed, and excessive spending could be questioned.

• Legally binding on your creditors.
• Prevents further legal action.
• Freezes all further interest and charges.
• Normally creditors write off some of their debt.
• You will keep your property if you are a homeowner.
• Procedures available to take account of changed circumstances.
• Will normally allow you to continue to trade, if you are self employed. You can also in most circumstances continue to act as a Director of a limited company.
• Will provide protection for unknown debts such as unpaid tax or overpaid tax credits.
• Overseen by an insolvency practitioner who is highly regulated and fully insured.
• Highly flexible and can include a lump sum in full and final settlement with potential completion of the IVA in a matter of months.

• You will normally pay in to an IVA for 2 more years than a bankruptcy.
• Your credit record will be adversely affected until one year after successful completion of your IVA.
• Your details will be entered on to a register that can be accessed via the internet.
• If you receive unexpected money during the IVA, such as an inheritance or a PPI refund, you will have to pay the proceeds in to the IVA.
• If you are a homeowner you will be asked to attempt to release equity in to the IVA in the last year.

• Benefits of a DMP:
  1. One affordable payment.
  2. A clear, established budget.
  3. You can request interest and charges to be frozen (at creditors’ discretion).
  4. In many cases, creditors will cease contact.
  5. No need to release home equity.
  6. Considerations for a DMP:
  7. Your credit rating and credit file will be impacted for six years or longer depending on your plan.
  8. Mortgages and secured debts are not covered.
  9. Your debt must be paid back in full.
  10. You may incur fees on top of your repayments.
  11. No protection for assets.

• More flexible than an IVA or bankruptcy.
• Most creditors will initially agree to freeze some or all of the interest and charges.
• Enables you normally to make 1 single monthly payment to your creditors.
• Suitable for short term financial difficulties.

• Doesn’t prevent creditors from continuing debt collection procedures.
• No guarantee that interest and charges will be frozen.
• Fees charged by the debt management company will extend the length of time it will take to pay the debt off in full.
• Continuing adverse impact on your credit rating.
• No safeguards if the debt management company goes out of business.

• Benefits of Bankruptcy:
  1. Protection from legal action and creditor demands.
  2. Court actions against you are likely to be stopped.
  3. Outstanding debt is generally written off after 12 months.
  4. Relief from dealing with creditors.
  5. Discharge from bankruptcy after the designated period.
  6. Considerations for Bankruptcy:
  7.  Adverse impact on credit rating for 6 years.
  8. Potential payment obligations for up to 3 years (if income is high enough).
  9. Difficulty obtaining credit while bankrupt.
  10. Limits on borrowing without notifying lenders.
  11. Possibility of losing your home if sold.

• Provides immediate debt relief and no further legal action can be taken against you.
• It allows you to normally make a fresh start after 12 months.
• You will be able to keep your house if a third party can purchase your share of the equity.

• There may be local publicity about your bankruptcy.
• If you intend to make yourself bankrupt the court fee and deposit will cost £680.
• You lose control over any assets you own and these may be sold by the official receiver or your trustee on behalf of your creditors.
• You will have to pay your monthly surplus income in to your bankruptcy for 3 years and no one can categorically say what you will pay until you are made bankrupt.
• Your credit file will be seriously affected for 6 years and your past record can continue to affect you financially long after you have been discharged.
• If your actions before bankruptcy are considered to have been reckless or irresponsible the restrictions of bankruptcy can be extended from between 2 to 15 additional years.
• Transactions prior to bankruptcy that contravened insolvency law can be challenged or overturned and could result in money having to be paid back in to the bankruptcy by friends or relatives.
• Bankruptcy can have serious implications for individuals with professional qualifications.
• If you own a car worth more than £2,500 you may well be required to sell it and replace it with a cheaper model.
• You cannot act as a Director of a limited company without consent of the Court.

• Benefits of a DRO:
  1. In most cases, you are discharged and outstanding debt cleared after a year.
  2. All debt is frozen during the time period.
  3. You are protected from legal action during the time period.
  4. Contact from creditors will cease.
  5. Considerations for a DRO:
  6. Your name will be added to the Insolvency Register.
  7. Your credit rating will be affected for 6 years.
  8. The process may impact your current and future employment.
  9. If your circumstances change and you cannot fulfil your obligations, the arrangement may be revoked.

• An inexpensive procedure to wipe out your debts.
• Normally the procedure only lasts 12 months.
• Assets with a value of £2,000 or less can be kept, together with a vehicle worth less than £2,000.

• Only applicable to individuals with debts less than £30,000.
• Not available to homeowners.
• Not available to individuals with a monthly disposable income that exceeds £75.
• You cannot own a car worth more than £2,000.
• Your details will be entered on to a register that can be accessed via the internet.
• Will not protect you from creditors who were not included on the original application.
• Your actions before the debt relief order will be reviewed and sanctions can be brought against you if it is considered that you acted recklessly.
• You cannot act as a Director of a limited company without Court consent.

• Benefits of a PTD:
  1. One affordable monthly payment.
  2. Creditor contact will reduce over time and be handled by your Insolvency Practitioner.
  3. All charges and interest frozen.
  4. On successful conclusion of your PTD your debts will be cleared.
  5. You receive full legal protection from any further creditor action.
  6. Considerations for a PTD:
  7. Your information will be added to the Insolvency Register.
  8. If you are a homeowner and have equity in your property, you may be required to release some to your creditors.
  9. Applying for credit cards, loans, mortgages, or other unsecured debts will be affected for the duration of your repayment. 

                   10. A Trust Deed will show on your credit file for 6 years.

                   11. Your expenditure will be monitored and you may be asked to reduce expenses                          

Advantages

• You pay a single monthly amount based on what you can afford
• Interest,charges and debt collection stop when your PTD is accepted
• A  PTD includes most of your non-priority or unsecured debts. Some debts, like student loans and fines, cannot be included
• Once you make your final payment, the rest of your debts are written off

Disadvantages

• Your PTD is kept on the public Register of Insolvencies for at least five years
• It is on your credit file for six years
• It may be harder to get credit
• Your may need to sell assets (items of value)
• You may have to sell any asset worth over £1,000. Like a vehicle
• If  you own property, you may need to pay some or all of your equity towards your debts
• Items on hire purchase agreements can be affected by the PTD. You may have to return them

• Benefits of a DAS:
  1. Interest and Charges are frozen if the debt payment plan is accepted.
  2. It is legally binding on your creditors.
  3. Any assets you have are protected.
  4. You don’t have to pay any additional fees in DAS.  The total you pay back is the total you owed.
  5. Gives you the ability to pay your debts in full over a timescale which is realistic for you.
  6. Considerations for a DAS:
  7. Your details will be registered on a public register (DAS Register).
  8. Your credit rating will be affected.
  9. If you don’t keep up the repayments the DPP could fail and your creditors could add interest and charges and take further action.

Advantages

• personalised debt repayment plan based on your needs and lifestyle.
• Your monthly payments will be based on what you can afford.
• The interest on your debt will be frozen.
• You will be protected against creditor action.
• Your assets will be protected meaning you will not be asked to sell your house,      or your car
• We will deal with creditors on your behalf.
• If your circumstances change, DAS can be flexible, including options to request to vary the plan and/or take payment breaks if your income has significantly reduced

Disadvantages

• Your credit file will be updated to reflect the fact you are in a debt payment plan and this will remain visible for six years
• You may find it difficult to obtain new credit or use an overdraft while you are in a debt payment plan
• You will be required to make all payments towards your debt payment plan, and  continue to pay your monthly expenditure and bills. If you fail to do so, your plan could be revoked
• If  you are required to submit a self assessment tax return, you must do so by the required deadline. If you fail to do so, your plan could be revoked.
• Interest & charges are only frozen while you keep to the agreed upon plan. If your plan is revoked due to breach of its conditions, your creditors may add back on interest & charges which had been frozen previously.