Personal Solutions

As you are a homeowner and have equity in your property, one option you may be able to look at would be to raise funds by releasing equity from your property by way of a Re-mortgage/Secured Loan to clear your debts. Re-mortgage/Secured Loan can be taken over different terms depending on lender criteria and your affordability. If you Re-mortgage/Secured Loan, then lender fees will apply, and broker fees may also be payable. You will need to seek the advice of a qualified mortgage adviser.

(+) It will not affect your credit rating as long as payments are maintained.
(+) You may not need a perfect credit rating as your home is used as security.
(+) Available over different terms dependant on affordability.

(-) You may have early redemption fees to pay to your current lender depending on your existing mortgage.
(-) Your home will be at risk if you do not keep up any required repayments.
(-) You would be securing previously unsecured debt.


Disclaimer
We do not offer advice on Mortgages, Secured Loans or Equity Release. If you show an interest in one of these areas, we can refer you to an FCA-regulated broker who is authorised to provide advice in that area. If you go ahead with one of their recommendations, we, as a firm, will receive a referral fee commission from the provider if the case completes.  

A Debt Management Plan (DMP) is a flexible informal agreement between you and your creditors to allow you to pay your debts at an affordable rate. A DMP is usually arranged on your behalf by a third party which can either be a fee charging debt management company or a debt charity. If you chose to use a fee charging company, there will usually be set up fees and a monthly management fee which will normally be included within your monthly payment.

(+) Just one monthly payment. 
(+) Negotiate with your creditors on your behalf.
(+) Pay only what you can afford.
(+) No record of your DMP will appear on a public insolvency register.
(+) Creditors are likely to look favourably on your proposed DMP, since it demonstrates you are willing to deal with your debts and pay them in full.
(+) Creditors will consider freezing interest and charges on your debts.
(+) DMPs reduce your monthly debt repayments.
(+) You will likely have less contact with the creditors, especially if you choose to use a third party DMP provider.

(-) Your credit file may be affected for up to 6 years.
(-) Not legally binding.
(-) No percentage of debt written off. 
(-) Your creditors are not obliged to freeze interest or fees on your debts.
(-) There is no guarantee that creditors will accept your offer of reduced payment.
(-) During a DMP, creditors can still contact you, unlike with a legally binding solution such as an IVA or Trust Deed.


Disclaimer
The information provided on this website is intended solely for informational purposes. Please note we do not offer advice or direct referrals for this specific debt solution.
If you are interested in further exploring this debt solution, we highly recommend contacting Money Helper. They are a trusted resource and can provide valuable guidance and support. You can contact them through their website at www.moneyhelper.org.uk/en
It's essential to seek professional advice when dealing with financial matters, and Money Helper can provide you with the most accurate and up-to-date information regarding available debt solutions.

Debt Relief Order (DRO) is an alternative option to bankruptcy for people who owe less than £20,000 and have a disposable income of £50 or less and assets worth under £1000. To qualify you must not be a homeowner and you cannot own a vehicle worth more than £1,000. The cost to set up a DRO is £90 which is payable upon application.

(+) Your debts will be written off at the end of the DRO.
(+) None of the creditors listed in the DRO application can take further action against you without the court’s permission.
(+) The fee (£90) is affordable and can be paid in instalments but the fee must be paid before the application can be made.
(+) It allows you to make a fresh start after 1 year.
(+) You will keep your assets and a vehicle.
(+) The approved intermediary ensures that you are given appropriate advice and that you fit the criteria for a DRO.

(-) DRO is entered on a public register.
(-) You can’t have a DRO if you have an existing bankruptcy order, an IVA, are subject to bankruptcy restrictions, or you have had a DRO in the last 6 years.
(-) You will not be able to have a DRO if you own a house (even no equity)
(-) You will remain liable to pay certain debts – in particular: student loans, fines, debts arising from family proceedings, budgeting loans and crisis loans owed to the Social Fund.
(-) Your employment may be affected
(-) Your DRO could be revoked if you don’t co-operate with the official receiver during the year your DRO is in force.
(-) You can not act as a director of a company or be involved in its management unless the court agrees.
(-) You will be committing an offence if you get credit of £500 or more without disclosing that you are subject to a DRO.
(-) You may have a debt relief restrictions order made against you for 2 to 15 years if you acted irresponsibly, recklessly or dishonestly.
(-) Your credit file will be affected for a period of 6 years.

An Administration Order is only available if you owe less than £5000 and have at least one county court judgment. It is legally binding on your creditors and offers you protection. You would need to complete a form detailing your income and expenditure and debts and take this to the court. You may be asked to attend a hearing where a judge make a decide whether to grant the order and how much you should pay to your debts based on your disposable income. If the order is accepted, then rather than making payments to your creditors you would make payments to the court who would take a 10% fee of each payment you make. If you cannot clear your debts in a reasonable amount of time you could request a Composition Order and request for the Administration Order to end after 3 years.

(+) Further interest and charges cannot be applied once in place
(+) Just one monthly payment
(+) Should financial circumstances change for the worse, debtors can apply to the court in order to agree a more affordable repayment schedule.
(+) Once agreed, the creditors listed on the Order cannot take legal action to collect any personal debts documented in the agreement without full permission from the court.

(-) In order to be accepted, a debtor will need to have a minimum of one County Court Judgement or CCJ registered against their name.
(-) The amount owed cannot cumulatively amount to greater than £5,000.
(-) The court may not grant the order as it is subject to individual circumstances. A creditor can object to an administration order and request that they are excluded from the arrangement. However, the court has full discretion to refuse their request.
(-) If you do not keep up repayments, the court can apply an ‘attachment of earnings order’, which will allow them to take money directly from your wages or cancel the arrangement. This means that the creditor harassment is now possible with regard to the collection of any outstanding personal debts.
(-) Your credit file will be affected
(-) You will be subject to a monthly charge of 10% of your repayments by the court for supervising the order.

A debt consolidation loan is a way of gathering a number of different debts into a single affordable payment. This is can be a method of paying off credit cards, store cards and personal loans.

(+) A debt consolidation loan will have a positive effect on your credit score, provided you meet the monthly repayments.
(+) Consolidation loans are an informal solution, and not recorded on a public insolvency register.
(+) You may have a longer time over which to repay your debts
(+) The amount you pay towards your debts each month may be reduced
(+) Provided you are able to keep up with repayments and do not incur any further unsecured debt, your unsecured debts will be repaid at the end of the consolidation loan term.
(-) You may not be eligible for a consolidation loan if your credit score is poor, and lenders feel your income is insufficient to make the repayments.

(-) If you do not keep up with the contractual repayments, then the lender can take action against you.
(-) You must repay your debt in full and interest is not frozen
(-) You may pay more overall if you choose a consolidation loan, since the loan is repaid over a longer period of time.
(-) It may take a far longer time to pay off your debts than with alternative solutions.

Equity release is a way of releasing the money tied up in your property without having to sell it and move to another home. You can either borrow against the value of your home or sell all or part of it in exchange for a lump sum or a regular monthly income. Equity release is available to people 55 or over who either own their property outright or have relatively small mortgages left to pay. Most equity release providers charge a lenders arrangement fee and you will also have legal fees to pay to a solicitor. You will need to seek the advice of a qualified equity release adviser who may charge a fee for their advice.

(+) Provides a cash sum or regular income
(+) Allows you to release equity from your home without moving and downsizing
(+) Some Equity Release Schemes allow you to make monthly, ad hoc or partial repayments if you intend to do so.

(-) Equity release could have tax implications and affect state benefits
(-) Releasing equity from your property is considered a long-term solution and not ideal for short term borrowing.
(-) You would be securing previously unsecured debts


Disclaimer
We do not offer advice on Mortgages, Secured Loans or Equity Release. If you show an interest in one of these areas, we can refer you to an FCA-regulated broker who is authorised to provide advice in that area. If you go ahead with one of their recommendations, we, as a firm, will receive a referral fee commission from the provider if the case completes.  

Bankruptcy is a legally binding form of insolvency which is designed to provide debt relief for people who are unable to clear their debts in a reasonable amount of time. All applications are now done online and there is an upfront cost of £680 which needs to be paid before you can declare yourself bankrupt however this can be paid in instalments. There are usually no payments required in bankruptcy however sometimes payments are required under an Income Payments Order which usually lasts for 3 years, depending on your disposable income.

(+) Creditors can't take further action unless the debts are secured on your home or other property.
(+) It allows you to make a fresh start after only a year
(+) If you own a home but have little equity in it, you may be also be allowed to keep this.
(+) You may be able to avoid having to sell your home if your spouse, partner or a relative can buy your share of its value after any debts secured on it have been paid.
(+) On completion of the Bankruptcy, the balance of what you owe your creditors is written off.
(+) You will be able to keep essential possessions and enough money to live on.
(+) You will be able to keep a vehicle for work, and worth £1,000 or less
(+) If you are self-employed, you will be allowed to keep any items vital for trade

(-) Your bankruptcy is entered on a public register and is advertised
(-) Your employment may be affected.
You will be unable to work as a company director, or be involved with the management of a limited company. You can also no longer practice as an accountant and in any financial services.
(-) You will remain liable to pay certain debts
(-) Any business you have will almost certainly be closed down
(-) If you apply to the court for your own bankruptcy, you will have to pay a court fee and deposit totalling £680.
(-) Your credit file will be affected for a period of 6 years
(-) Your home is likely to be sold if it has a lot of equity
(-) Bankruptcy can affect your application to become a British Citizen and your status as a ‘person of independent means’. While you have not been discharged, your application is likely to be turned down.

*This is for Scottish residents only.

A Protected Trust Deed is a legal arrangement between you and your Creditors which gives you protection from Creditors taking action against you to recover debts.

(+) Writes off a large percentage of debt
(+) Prevents or stops any legal action - including sequestration
(+) Write of all interest & charges
(+) Only your disposable income will be used to pay creditors
(+) Able to negotiate terms
(+) If you're a business, carry on trading
(+) You will not be expected to sell any of your assets.

(-) It will affect your credit rating
(-) Only unsecured debts are covered
(-) It will be advertised in the local press, but only could be found if someone knows look.
(-) Creditors may object to the Trust Deed proposal in sufficient number or value, causing it to fail to achieve protected status, as a result, sequestration (bankruptcy) or DAS become alternative solutions.
(-) Creditors may not approve the trust deed
(-) Creditors will be able to pursue you for any new debts
(-) Your credit file will be affected for a period of 6 years 


Disclaimer
The information provided on this website is intended solely for informational purposes. Please note we do not offer advice or direct referrals for this specific debt solution.
If you are interested in further exploring this debt solution, we highly recommend contacting Money Helper. They are a trusted resource and can provide valuable guidance and support. You can contact them through their website at www.moneyhelper.org.uk/en
It's essential to seek professional advice when dealing with financial matters, and Money Helper can provide you with the most accurate and up-to-date information regarding available debt solutions.

*This is for Scottish residents only.

A Debt Arrangement Scheme (DAS) is a formal, government-run debt management solution established by the Scottish Government. A DAS allows you to repay your debts in a manageable way over an extended period of time.

(+) One affordable monthly payment
(+) Legal protection from creditors
(+) Interest, fees and charges on the debt are frozen from the date the Debt Payment Programme (DPP) application is made and these are written off when the DPP is completed.
(+) The creditors are forbidden from taking any further action against you to recover the debts owed to them.
(+) All your assets unaffected, including the home (even with significant equity)
(+) Any arrestment on the wages that is already in place is stopped
(+) Creditors that do not accept the proposals can be forced to comply with the arrangement if it is judged to be “fair and reasonable”.
(+) It is possible to set up a single debt DPP as well as joint DPP. The joint applicants do not need to be jointly and severally liable for any debts.

(-) If you do not comply with the DPP conditions then it may be withdrawn. Creditors are then free to pursue legal action and to add back on their interest, fees and charges if they wish.
(-) Credit rating may be adversely affected
(-) There is no debt being written off, only relief from further interest, fees and charges, therefore a DAS may take considerably longer to complete than an insolvency option such as a Protected Trust Deed or Sequestration.


Disclaimer
The information provided on this website is intended solely for informational purposes. Please note we do not offer advice or direct referrals for this specific debt solution.
If you are interested in further exploring this debt solution, we highly recommend contacting Money Helper. They are a trusted resource and can provide valuable guidance and support. You can contact them through their website at www.moneyhelper.org.uk/en
It's essential to seek professional advice when dealing with financial matters, and Money Helper can provide you with the most accurate and up-to-date information regarding available debt solutions.

*This is for Scottish residents only. 

Minimal Asset Process Bankruptcy, also known as MAP, is quite a new debt solution. It was introduced on April 1 2015 as a new route into bankruptcy for people with low income and minimal assets.

(+) If you meet all the conditions of MAP, the process lasts no longer than six months so you can start afresh in a relatively short period of time
(+) There is a fee of £90 to use this process, which is cheaper than ‘standard’ sequestration
(+) You don’t have to make any payments towards your debt as you have no disposable income
(+) All debts are written off after six months, as long as you have met all the requirement
(+) The pressure from creditors is relieved – they are not allowed to contact you whilst in this process

(-) You won’t be able to obtain credit for a long time, as sequestration stays on your credit file for six years. Even when you are released from the process, it will be difficult to borrow money.
(-) It could affect future job applications, as some employers don’t allow their staff to enter a formal debt process. Even if you decide not to tell them, your details will be on the Register of Insolvencies which is open to public scrutiny. You’ll also be prevented from becoming a company director.
(-) Your ability to secure a tenancy agreement might be affected
(-) If you don’t adhere to the conditions of MAP, the court may issue a Bankruptcy Restriction Order which prolongs the terms for up to 15 years
(-) Should your circumstances change for the better after you enter the Minimal Asset Process, you’ll need to revert to standard sequestration which will involve a further fee, and regular payments towards your debt.

*This is for Scottish residents only.

Sequestration (Bankruptcy) is the term used for bankruptcy in Scotland and is a formal insolvency process that involves that appointment of a Trustee to recover money from any assets you own which may include your home. 

(+) 100% debt relief is possible in a short amount of time
(+) Creditors do not have an opportunity to reject the sequestration
(+) Prevents or stops any legal action
(+) No longer have to deal with creditors
(+) Interest, fees and charges are frozen – the creditors can only claim for the outstanding balance due as at the date of sequestration.
(+) Affordable monthly payment if you are asked to pay a contribution that is calculated after an allowance has been made for all the general living expenses and household bills.

(-) Assets of a significant value, like a house or a car, may be sold to release funds for your sequestration.
(-) It may have implications for employment prospects both now and in the future – legal advice should be sought.
For instance you are unable to act as a director of a limited company or be involved in the formation, promotion or day-to-day financial management.
(-) Student Loans are not discharged
(-) Credit rating may be adversely affected
(-) £200/£90 application fee to be paid to the Accountant in Bankruptcy
(-) You must declare that you are bankrupt to any person that you attempt to obtain credit from, either alone or in a joint application, where the credit amount totals £2,000 or more, or in all circumstances where you already have debts totalling £1,000 during the period of the bankruptcy. You must also declare your bankruptcy for a period of 6 months following your discharge from a Minimal Asset Process bankruptcy.