How to write off debt
If you feel out of control when it comes to debt, you must remember that there are debt solutions available to you. At Baines & Ernst we can help you find the right one to overcome your money worries and avoid your unsecured debts becoming bad debts.
Circumstances in which lenders may write off debt
1. Getting unfair debts written off by the courts
This applies when the terms of the debts are considered grossly unfair, in the same way that a contract can be considered unfair in a court of law. This type of write-off is reserved for extreme cases. For example, you may have paid interest rates and charges that were disproportionate to the loan taken out or the lender may not have informed you about the total cost of the credit you took out with them.
2. Debts written off as part of an IVA
One of the most effective ways to pay and write off unsecured debt is to enter an Individual Voluntary Arrangement (IVA), which is a legally binding debt solution that offers protection to you and the lenders you owe money to.
If your lenders agree to the IVA, you will repay debts at a lower rate, interest and charges will be frozen and any debts included in the IVA that still exists at the arrangement period – which formally lasts for 5 years – will be written off.
If you are a homeowner, you could be asked to release equity from your property to help repay your debts, but this depends on your personal circumstances.
3. Debts written off with a Protected Trust Deed
A Protected Trust Deed is available to people living in Scotland. The Deed lasts for a period of three years, and similarly to an IVA mentioned above, monthly repayments will be lower, interest and charges will be frozen and any debts that still exist at the end of the Deed period will be written off.
If you are a homeowner, you could be asked to release equity from your property to help repay your debts, but this depends on your personal circumstances.
4. Debts written off as part of a Debt Relief Order or Bankruptcy
If you cannot afford to repay your debts and are on a very low income, you could qualify for a Debt Relief Order which will free you from your unsecured debts in 12 months.
You could also become debt free in 12 months with Bankruptcy, however you could still be asked to make contributions towards your debts for up to three years and your valuable assets including your home, will be sold to help repay your lenders.
Beware of companies who promise to clear all your debts
If a company claims that they can help you write off large amounts of debt quickly and easily, you’d be right to think the offer is too good to be true!
Sadly, there are no quick fixes to getting out of debt. Lenders will expect payment and unless you go through a legally binding solution like an IVA, Debt Relief Order, Bankruptcy or Protected Trust Deed, lenders have every right to pursue your for payment.
Many people have been defrauded by rouge companies claiming that they can write off debt – so save yourself time and money and choose the help of a professional management company to help you get your finances back on track.
Debt services you can trust
At Baines & Ernst, we do not offer a ‘debt elimination’ service; we offer honest advice and expert help to getting out of debt.
We’ve helped more than 140,000 people escape the pressures of debt, so don’t struggle alone any longer – let us help you find a solution that will help you beat debt once and for all!
