Debt Helpline Open
Mon-Fri 8am-8pm, Sun 10am-6pm
Struggling with debt?
available for you.
- Reduce your payments
- Deal with interest & fees
- Pay what you can afford
Some solutions may not be suitable in all circumstances. Fees apply. Your credit rating may be affected.
Get Help
Reduce your monthly payments
Less Stress
We take the stress out of dealing with debts
Debt Free
Take the first step to becoming debt free
Less Pressure
We will setup everything for you
Money Helper is an important service set up by the Government. They provide free debt counseling, debt adjustment and credit information.
Reduce your payments
Our mission is to assist individuals dealing with debt-related issues. Take the first step towards finding the right debt solution for you by reaching out to us.
Some of the debts we can help with
We can help you with some of the common debts below and many more.
Compare Different Solutions
Debt Management Plan
A Debt Management Plan is an informal repayment agreement between you and your creditors to pay all of your debts.
Debt management plans are an alternative debt solution to formal arrangements, such as an Individual Voluntary Arrangement or Bankruptcy and available to residents in the United Kingdom.
Debt management plans are normally used under these circumstances:
- You can only afford to pay a small amount to creditors each month
- You have problems with debt but will have the ability to make repayments within several months
- You can organise a payment plan with your creditors yourself, use a licensed Debt Management Company (fees are charged) or via the free sector
- Payments are made regularly to the company
- The company divides the money between all your creditors
Pros
- You only pay one affordable payment to the DMP company
- The payment is flexible depending on your circumstances, it can increase or decrease
- Payments can be reduced & interest rates can be frozen by creditors, however, they are not obliged to do this
- Some charities & organisations provide this service free of charge (you can contact the Money Advice Service for more information)
- Avoids the need for a Formal Insolvency Procedure
Cons
- All the creditors need to agree to their individual arrangement for this plan to be effective
- Interest & charges are not guaranteed to be frozen
- Your credit rating is affected as your monthly payments are not contractual
- Debt management plans can affect your credit file for a minimum of 6 years, as in most cases you will have defaulted on the original credit agreement terms once you enter into the arrangement
IVA
An IVA (Individual Voluntary Arrangement) is a legally binding agreement between you and your creditors to pay back your debts over a period of time.
You agree to make regular payments to an insolvency practitioner, who will divide this money between your creditors.
The fees charged are taken from the affordable monthly payment you make over the agreed term of the IVA
An IVA can give you more control of your assets than bankruptcy.
Pros
- One realistic and affordable payment over a set period of time
- After successful completion of your IVA unaffordable debt is written off
- Protected Legally – After your IVA has been approved, no further action can be taken by creditors and all interest and charges are frozen
- The fees charged are taken from the affordable monthly payment you make over the agreed term of the IVA.
- Interest and charges will stop
- Support from our team who can help you through the journey
- Your expenditure will be reviewed at the start and annually to ensure your payment remains affordable
- There are restrictions on the expenditure of a person who enters into an IVA
Cons
- Creditors don’t have to agree to an IVA proposal so it’s not guaranteed
- It affects your credit file for six years
- Your information will be held on the public insolvency register
- There are costs involved with an IVA, which are outlined in our Fees and Key information section. However, costs are deducted from the contributions you make. These will be fully explained to you and detailed fully in your IVA proposal
- If you own a property/properties, you may be asked to release equity from the value to pay off debts. A remortgage may attract higher rates of interest or, if no remortgage is available, an IVA may be extended by 12 months
- If your IVA fails, it may result in Bankruptcy
- If you earn additional income then a percentage of this may need to be paid into the IVA
- Only unsecured debts included within the individual voluntary arrangement may be discharged at the end of the period and unsecured debts not included remain outstanding
- Borrowing any amount over £500 can only be done with the express permission of the Insolvency Practitioner
Administration Order
An administration order is a repayment plan arranged by the County Court.
Administration orders are only available in England, Wales and Northern Ireland. If you live in Scotland there are other options available to help you deal with your debts.
An administration order is legally binding on your creditors and gives you protection from them.
The creditors included in the order can’t contact you for payment or add any more interest or charges to your debts once the administration order has been approved.
To apply for an administration order you need to have:
- less than £5,000 debt in total
- received at least one court judgment
Pros
- There is no upfront cost to you
- You make just one monthly payment into court
- Your home is not at risk
Cons
- The debt must be below £5,000
- You may have to sell valuable possessions
- Your details are recorded on a Public Register
- Your credit rating will be adversely effected
- The order will be listed on a public insolvency register
Debt Relief Order
Debt Relief Orders (DRO) is a formal debt solution designed for people with little or no assets and low income.
If you don’t own your own home & have little spare income and debts that are less than £50,000 a Debt Relief Order (DRO) could be a way to deal with your debts.
It is an alternative debt solution to Bankruptcy or an Individual Voluntary Arrangement and available to residents of England, Wales and Northern Ireland.
Pros
- Typically a Debt Relief Order lasts twelve months
- Debt Relief Orders don’t require you to make payments into them
- Creditors are stopped from taking any further action against you
- A Debt Relief Order is relatively simple process to start and can be done through various charity organisations
Cons
- Your credit rating will be affected for six years
- Owning your own property or having assets over £4,000 will stop you entering into a Debt Relief Order
- A Debt Relief Order may be cancelled if you do not comply or if your circumstances change during the the 12 month period, for example if you’re able to make payments towards you debt(s)
- Entering into a DRO will be recorded on a public register
- If you can afford more than £100 after your monthly essentials have been budgeted for then you will not qualify
Bankruptcy
If you are unable to pay your debts you can apply to make yourself bankrupt. Bankruptcy is a formal insolvency route and can have serious financial implications.
Other people can put you into bankruptcy or you can make this choice yourself. It’s something to be carefully considered.
The three ways you can go bankrupt are: you apply for bankruptcy yourself; an application for bankruptcy from a creditor; by the IVA Supervisor if you fail to meet the terms of your IVA.
Pros
- Your Bankruptcy could be discharged within 12 months
- It can free you from the pressure from creditors
- All debts that qualify for bankruptcy are written off
- The stigma of bankruptcy is not what it once was
- The process to make yourself bankrupt is now completed online
Cons
- You lose control of finances and assets, the official receiver or Trustee appointed on your case will decide what happens to your valuable asset and finances. Your information will be held on a public register
- Under certain circumstances, bankruptcy can affect types of employment
- It will affect your credit file for six years
- Putting yourself into bankruptcy will cost £680, this can be paid in monthly instalments however you will not be afforded the protection of bankruptcy until such time as this is paid
- Depending on if you have proven disposable income and employment status, you may have to pay income payments for up to thirty-six months
Breathing Space
Breathing Space is a new debt option that gives you temporary protection from the creditors you owe money to if you’re struggling with debts.
This includes:
- freezing most interest, fees and charges on debts
- pausing most enforcement action and contact from creditors
There are two types of Breathing Space:
- Standard Breathing Space – which you apply for through debt advice, and which lasts for up to 60 days, with a review between days 25 and 35.
- Mental Health Crisis Breathing Space – which is specifically for people in mental health crisis treatment and can only be applied for with an Approved Mental Health Professional (AMPH). It lasts for the duration of your treatment, plus 30 days.
Scottish Solutions
Minimal Assets Process (MAP)
A MAP is aimed at people with a low income and not many assets and is cheaper and more straight forward than sequestration or full bankruptcy. You can only apply for a MAP through an approved money adviser and you will need to pay a fee of £50 (reduced from £90 at least until the end of September 2020) to the Accountant in Bankruptcy.
This can be paid in instalments, but the full amount needs to be paid before you can apply. The fee may be waivered if you receive certain benefits. To qualify you must meet the following criteria:
- Your income must be solely made up of benefits or you must have no surplus income to make a contribution once you have paid your essential living costs
- Your debts are more than £1,500 and less than £25,000 (increased from £17,000 until at least the end of September 2020)
- Your car is worth £3,000 or less
- Any other assets are worth less than £2,000 with no single item worth more than £1,000
- You are not a homeowner
- You haven’t been made bankrupt in the last 5 years
Benefits of a MAP
- A MAP usually lasts for 6 months however if your circumstances change or you do not comply with the terms this may be extended
- Debts will be written off once the MAP is discharged
- Creditor contact will stop once the MAP is in place
Considerations of a MAP
- Once the MAP is in place, you are bound by formal insolvency proceedings and your credit rating will be affected
- Your details will be recorded on the Register of Insolvencies
- While during the MAP and for a period of six months after you cannot borrow more than £2,000 without declaring you are bankrupt to the lender
- Your employment could be affected, and you are unable to act as a company director
Trust Deed
A trust deed is designed to help people with unaffordable debts of at least £5,000 and needs to be set up with the help of an Insolvency Practitioner who will charge fees to set up and supervise the PTD, however these fees will usually be included within the monthly payment which you make.
The Insolvency Practitioner will write to your creditors and ask them to agree to the trust deed. Your trust deed will then become protected if a sufficient proportion of creditors agree to it.
The agreement usually lasts for four years and once it’s completed, any unsecured debts included will be written off. Trust deeds are not available if you live in England, Wales, or Northern Ireland. In these countries, IVA is a similar solution.
There are restrictions on the expenditure of a person who enters into a protected trust deed.
During your Trust Deed, you will continue to pay your bills and other important living costs and make a payment into your trust deed towards your unsecured debts. Your creditors will expect you to pay in as much as you realistically can afford, so may want you to cut back on expenditure in some areas.
Benefits of a Trust Deed
- You will be debt free within an agreed time frame
- Interest and Charges will be frozen once the Trust Deed is protected
- After successful completion any remaining debt included in the arrangement will be written off
- Creditor contact will stop once the Trust Deed is accepted
- A PTD will protect your home if you are a homeowner
Considerations of a Trust Deed
- Once your PTD is approved you are bound by formal insolvency proceedings and your credit rating will be affected
- Failure of a PTD could result in bankruptcy
- A re-mortgage may be required if you are a homeowner and if you cannot re-mortgage the PTD may be extended
- Your details will be recorded on the register of insolvencies
Sequestration
Sequestration/Bankruptcy is a legal process usually suitable for people who little hope of paying back their debts in a reasonable time and whose circumstances are unlikely to change. Bankruptcy works different in different parts of the UK. If you live in England, Wales or Northern Ireland please see the bankruptcy section.
Sequestration can give you a fresh start and will write off your debts however the decision should not be taken lightly as it can affect other areas of your life such as your employment or living arrangements.
You could be asked to sell valuable assets such as your home or car, but you’ll be able to keep the things you need for day-to-day living. The Bankruptcy will usually least for 12 months and there are usually no payments required, however if you have any surplus income then payments are required under an Income Payments Arrangement which can last for up to 4 years.
The Accountant in Bankruptcy (AiB) are responsible for administering the process of personal bankruptcy in Scotland. You need to have at least £3,000 debt to qualify and not have been made bankrupt in the last 5 years.
If your debts are less than £3,000 then you may be able to apply for a Minimal Assets Process Bankruptcy (MAP). You can only apply for bankruptcy through an approved money adviser and the fee is £150 payable to the Accountant in Bankruptcy (reduced from £200 until at least the end of September 2020).
You can pay in installments however you must have paid the fee in full before the application is made.
Benefits of a Bankruptcy
- Bankruptcy usually only lasts for 12 months
- Debts will be written off once the bankruptcy is discharged
- Creditor contact will stop once the bankruptcy is in place
Considerations of a Bankruptcy
- You could lose assets of value including your home if you are a homeowner
- Once your Bankruptcy is approved you are bound by formal insolvency proceedings and your credit rating will be affected
- Your details will be recorded on the register of insolvencies
- Your employment could be affected, and you are unable to act as a company director
What is a DAS?
Under DAS you can apply for a Debt Payment Programme (DPP) which allows you to pay off your debts over a period of time. If your circumstances change you can apply to vary the terms of the DPP. You must seek the assistance of a Money Adviser before you can apply for a DPP.
You’ll keep making reduced repayments until you have repaid your debt in full which will take longer as you will be making reduced payments.
The DAS is not available if you live in England, Wales or Northern Ireland. In these countries, a debt management plan is a similar solution although with different features, costs and associated risks.
Benefits of a DAS
- Interest and Charges are frozen if the debt payment plan is accepted
- It is legally binding on your creditors
- Any assets you have are protected
- You don’t have to pay an administration fee for the running of the DPP
Considerations of a DAS
- Your details will be registered on a public register (DAS Register)
- Your credit rating will be affected
- If you don’t keep up the repayments the DPP could fail and your creditors could add interest and charges and take further action.
Consolidation Loans
Banks, credit unions, and instalment loan lenders may offer debt consolidation loans. These loans convert many of your debts into one loan payment, simplifying how many payments you have to make.
These offers also might be for lower interest rates than what you’re currently paying.
Many of the low interest rates for debt consolidation loans may be “teaser rates” that only last for a certain time. After that, your lender may increase the rate you have to pay.
Money Helper is an important service set up by the Government. They provide free debt counseling, debt adjustment and credit information.
