“If you’re struggling to cope with your debts, the best thing to do is to speak with a professional debt management company who will be able to explain the options available to you. A specialist DMC can negotiate with your creditors on your behalf to reduce the payments you are making overall and will distribute agreed payments to the creditors you owe money to.
A Debt Management Plan is an informal arrangement where you agree with your creditors to make regular payments towards your debts over a period of time. This could help you to streamline your finances as you’ll be paying one monthly fee to your creditors as opposed to several.
An Individual Voluntary Arrangement, also known as an IVA, is a formal agreement with your creditors to pay all or part of your debts over a period of time. They have to be set up by a licensed Insolvency Practitioner and there are certain costs you need to pay.
Debt Management Companies, or DMCs, provide assistance if you are in debt and can negotiate with your creditors on your behalf to reduce the payments you are making overall. The DMC will distribute agreed payments to the creditors you owe money to.
An Administration Order can help you deal with your debts if they are £5,000 or less and you are able to afford to make regular payments to your creditors. You have to apply for an Administration Order through your local county court and there are certain costs and conditions you need to meet.
A Debt Relief Order, also referred to as a DRO, is an alternative to bankruptcy and can help you deal with certain types of debt if you owe less than £15,000, do not own your own home and your monthly disposable income is £50 or less every month after paying bills. You have to meet certain criteria to apply for a DRO through an approved intermediary.
If you’ve been made bankrupt, a Fast Track Voluntary Arrangement, FTVA, may be a way to cancel the bankruptcy and deal with your debts. You need to apply for an FTVA through an officer of the bankruptcy court called the Official Receiver and your creditors have to agree to it. There are costs involved and conditions you need to meet.
A consolidation loan is when you take out a single loan to pay off several existing debts. You should get independent advice before taking out a consolidation loan and make sure it’s the best way to deal with your debt problem.”