Debt questions

We can answer your debt questions

Money Advice Direct is an established organisation on the subject of debt management and the IVA industry. We receive 1000’s of calls each week from people in debt. In this section we will cover IVAs, debt management and also answer some of the most commonly asked questions about debt.

EXPERT ADVICE ON ALL OF YOUR DEBT QUESTIONS

Frequently asked questions about credit and debt and bankruptcy.

• I have been made Bankrupt – what will happen to my home?
• What is debt management?
• What is an IVA?
• How can I repair my credit?
• What benefit am I entitled to?
• What is the Bankruptcy process?
• How much will it cost to make myself bankrupt?
• Where is the bankruptcy order made?
• What will happen at Court?
• Who deals with bankruptcy cases?
• What are the duties of a bankrupt?
• What are the effects of bankruptcy?
• How does bankruptcy affect your credit rating?
• How long does Bankruptcy last?
• What are the main changes of the new legislation( Enterprise Act 2002)?
• I have been living abroad but have large debts in the UK. How will this affect my credit rating in the UK and should I file for Bankruptcy?

There are so many other debt questions relating to money, debt and credit. Please feel free to call an advisor on 0800 074 6918 for a quick response to your debt questions

Debt Questions on the Individual Voluntary Arrangement - IVA

We have team specialising in IVA advice. An IVA is suitable if you in debt over £15,000. The IVA procedure can help you reduce your debt and become debt free (subject to terms and conditions) in 60 months or less. For more information please look the IVA section.. If you're debts are serious one call our IVA unit can show you how to reduce your debts with an IVA

IVA Key Points:-

• Stop creditors harassment. Please note that for consumers considering an Individual Voluntary Arrangement (IVA) beware of any claim that implies that when the consumer is on an IVA/PTD creditors will no longer contact them. Whilst an IVA is legally binding and creditors are refrained from contacting the debtor regarding payment of the debt they may still contact the debtor in cases of promotional material and/or certain other circumstances.
• Debt free in 60 months or less. Please note that for consumers considering an Individual Voluntary Arrangement (IVA), an IVA it needs to be accepted by 75% of the creditors (by value) for the interest and charges to be frozen. Please therefore note that a guaranteed outcome favourable to the consumer in negotiations with creditors is not always possible.
• With an IVA, although the consumer may become debt free (subject to terms and conditions) at the end of the Bankruptcy, IVA or PTD period, the effect on their credit rating is likely to remain on file for 6 years. In addition the consumers / debtors name, address and birth date will become public knowledge on the governments “Individual Insolvency Register”. The individual insolvency register (insolvency.gov.uk/eiir/) allows anyone to check, quickly and easily, if someone is bankrupt or has taken out an "individual voluntary arrangement" (IVA).
• Suitable for debts over £15,000.
• Legally binding
• Suitable for debts to 3 or more creditors
• You have to be in regular employment. We provide IVA advice and IVA information and we are insolvency practitioners, licensed to agree IVAs for our clients.
• An IVA is suitable if you suffer from; credit card debt, personal loan debt, store card debt or any other unsecured debt. Please note that for consumers considering an Individual Voluntary Arrangement (IVA) that only unsecured debts are to be included e.g credit cards, unsecured loans and bank overdrafts. Please note that at the end of the period those debts that are not included such as secured debts, Government fines and child support payments will remain to be outstanding
• Main alternative to bankruptcy.

Debt Questions on Debt Management Plans – DMP

Are you struggling to pay credit cards, loans, store cards or catalogues? Would you like someone to help sort out your payments and talk to creditors for you? Would you like to be able to pay one affordable amount to all your creditors each month? If this sounds like you, a Debt Management Plan may be just the thing.

Key points of Debt Management Plans - DMP

• Reduction of debt. Please note that for consumers considering a Debt Management Plan (DMP), if interest and charges continue to apply then there will be an increase in the total amount of debt to be repaid and that due to lower monthly payments it is very likely that the debt will have to be repaid over a longer period of time.
• Clearing of debt over time with assistance from the key creditors. 11. Please note that for consumers considering a Debt Management Plan (DMP), although the consumer may become debt free (subject to terms and conditions) at the end of the DMP period, if a default notice has been issued the effect is likely to remain on the consumer's credit profile for a lengthy time.
• Debt management plans are suitable for debts of all levels.
• They are not legally binding and fees apply.
• They are good option for dealing with debt quickly and in a controlled manner. It means people you owe money to will not contact you, your debts will be cleared in a specific time period and your monthly payments are reduced.
• Although debt management plan providers may be able to negotiate a lower monthly payment this will usually lead to an increase in the size of the sum to be repaid and that a consumer's credit rating will be impaired.
• Creditors are not obliged to accept the debt repayment plan and unless they do so, interest and other charges will continue to be added.
• Do not be misled into thinking that a DMP will improve the consumer's credit rating because the debtor is likely to have an adverse marker on their credit profile for longer due to an increase in the repayment period and, as the agreement is not legally binding the plan can be cancelled at any point meaning that the debtor could fall further into arrears.
• Please note that for consumers considering a Debt Management Plan (DMP), the possibility of potential negative outcomes such as the effect on their credit rating, potential for bankruptcy and likelihood that interest and/or charges will continue to accrue therefore increasing the debt.
• Please note that for consumers considering a Debt Management Plan (DMP); a DMP is not legally binding creditors therefore may continue to request further payments or take enforcement action against them. A debt management company can not guarantee that there will be no further contact from the creditor.

Debt Questions on Debt Consolidation

Debt consolidation entails taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan. Debt consolidation can simply be from a number of unsecured loans into another unsecured loan, but more often it involves a secured loan against an a property.

Key Points of Debt consolidation

• Replaces multiple loans with a single loan
• Lower monthly payment
• Longer repayment period.
• They bring together all existing credit card debt, personal loan debt, store card debt or any other unsecured debt

Whether its debt management, IVA or just a simple debt advice question you require, please feel free to call one of our specialists. They will provide the correct advice to help you reduce your debts. Our confidential and non-judgemental advice can be obtained 7 days a week our specialist debt management team can advise on a range of options designed to help reduce debts. Please feel free to call in 0800 074 6918.

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