The Debt Line

Apply For Debt Help. Complete the form for help and advice. We don't carry out any credit checks nor do we base our help on your credit history,we will send you a free advice pack and you then can decide if you would like our help?

Bankruptcy

If you have no money left over in your budget, or you have so little that it will take many years for you to re-pay your debts, you may want to look at bankruptcy as an option.

Going bankrupt can take the pressure of creditors away from you. You are allowed to keep certain things, like household goods and a reasonable amount to live on. When the bankruptcy order is over, you can make a fresh start and the money you owe is usually written off. In many cases, this can be after only one year. Creditors have to stop most types of court action to get their money back following a bankruptcy order (but in some cases the bailiffs may still be able to take your belongings away).

However, there are disadvantages to going bankrupt, for example:

  • it will cost you money (up to £495) to go bankrupt
  • if you own your own home, it will usually have to be sold
  • some of your possessions might have to be sold, for example, you will usually lose your car and any luxury items you own
  • if you own a business, it is more than likely that your business will be closed down and your employees sacked
  • you can't keep your bankruptcy private. A list of bankrupt people is published on the internet and your case could also be published in your local newspaper
  • even when you are no longer bankrupt, you could have another order, called a bankruptcy restrictions order made against you. These orders can be made if, for example, you took on debts knowing that you had no hope of paying them back. A bankruptcy restrictions order can last for 15 years and will make your financial affairs very restricted
  • even when you are no longer bankrupt, there are some debts such as court fines and student loans that will never be written off.

If you are thinking about going bankrupt, you should get advice from an experienced adviser. Your local Citizens Advice Bureau can give advice about bankruptcy. To search for details of your nearest CAB, including those that can give advice by e-mail, click on nearest CAB .

How debt affects your credit record

You need to be aware that some of the options to deal with your debts will affect your credit record. This will mean that it will be more difficult for you to get credit in the future, including a mortgage or even getting a new mobile phone contract.

This is because information about your financial situation is collected and stored on file by credit reference agencies. They give this information to lenders like banks, building societies, finance houses and major retailers. The lender uses this information to help them decide whether or not to give you credit.

Information held by credit reference agencies includes:

  • your credit agreements, including balances and payment histories
  • failure to pay your mortgage
  • whether you have had your home taken back (repossessed)
  • county court money judgments (CCJs)
  • bankruptcy orders
  • Individual Voluntary Arrangements (IVAs)
  • previous credit searches
  • Administration Orders.

You can check your credit file to make sure it is correct.

For more information on your credit record..

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Thinking about an IVA or Individual Voluntary Arrangement?

An IVA is a legal contract between you and your creditors, it is a legally binding arrangement supervised by a Licensed Insolvency Practitioner, the purpose of which is to enable you to reach a compromise with your creditors and avoid the consequences of bankruptcy.

The IVA enables you to cut your debts to an affordable level and clear them over a fixed period. The compromise should offer a larger repayment towards your debt than could otherwise be expected were you to be made bankrupt. You can even take out a fresh mortgage while in an IVA. What's more, it is a totally private arrangement – nobody needs to know about it apart from you, your advisors and your creditors. An IVA ensures that your home is protected and your job is not at risk.

You make one single manageable monthly payment, based on your budget, for 3-5 years. After that the remaining debt is wiped clean, leaving you completely debt-free. This means that an IVA can write off up to 75% of your debts.

However, under the terms of the agreement you undertake to contribute as much as possible within your budget. So in reality, an IVA presents an opportunity for you to pay whatever as you can in a manageable way – a way you can afford.

Who can benefit from an IVA?

An IVA is available to all individuals, Sole Traders and Partners who are experiencing creditor pressure and it is used particularly by those who own their own property and wish to avoid the possibility of losing it in the event they were made bankrupt.

How an IVA Works

1) Proposal submitted to court with a view to obtaining an Interim Order.

2) An Interim Order is issued by court stopping creditors from taking any action against you whilst a meeting of your creditors is called and held to decide whether the proposals are acceptable to them or not.

3) The following information will need to be gathered and presented as part of your IVA file:

The Nominee's comments on the debtor's proposals

The Proposals

Notice of the date and location of the meeting of creditors to vote on your proposals

A Statement of Affairs that lists your assets and liabilities and your income and expenditure

A background statement that explains the circumstances that culminated in the IVA being required

A schedule advising creditors of the requisite majority required to approve the IVA

A complete list of creditors

A guide to the fees charged by the Supervisor following approval of the IVA

A form of proxy for voting purposes

Creditors Meeting

The creditors meeting is usually held 2-4 weeks after the above has been circulated to creditors. The purpose of the meeting of creditors is to agree or reject your IVA proposals with or without modifications which can be requested by creditors at the meeting.

Acceptance of the proposals requires 75% in value of those creditors who vote. The 75% relates only to those who actually vote, all will be bound by the terms of the arrangement whether they voted or not.

Upon approval of the IVA, a Supervisor is appointed (usually the Nominee) to ensure the proposals are adhered to and to distribute the dividends to creditors.

Assuming the debtor complies with the terms of the arrangement, upon completion of the IVA he will be fully discharged from all liabilities included within it.

We have teamed up with the IVA helpdesk to offer you this offer,Helping you to become debt free is our mission by providing you with the right advice,we will deal with your creditors for you and we will help you through the whole process,we provide a free meeting,a free phone consultation,no up-front fees ,no hidden administration fees,our small team will provide you with expert specialist advice,we will advise you on the best solution to your debt problem and continue to work with you until the IVA has been completed.

 

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