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Debt Solutions

There are a number of debt solutions available in the UK, each designed to help people improve their particular financial circumstances.

You can find out more about the debt solutions available in your location, and our advisors will make sure you make an informed decision on the best option for you.

Individual Voluntary Agreement

An Individual Voluntary Arrangement (IVA) is a legally binding debt solution in the UK. It allows individuals with substantial unsecured debts, typically £6,000 or more, to consolidate their debts into manageable payments over a fixed term, usually five to six years.

IVAs are ideal for those facing financial hardship but wanting to avoid bankruptcy. To qualify, one must owe money to at least two creditors, reside in England or Wales, and have a steady income to make monthly payments.

After successful completion, any remaining included debts are typically written off, providing a fresh financial start.

Debt Management Plan

A Debt Management Plan (DMP) is a flexible debt solution for people facing unsecured debts they can’t afford to repay at once. It typically involves negotiating with creditors to make reduced monthly payments over a longer period of time, often via a DMP provider. This informal agreement helps individuals regain control of their finances without the legal obligations of more formal arrangements. However, it doesn’t provide the same legal protections as solutions like an Individual Voluntary Arrangement (IVA). DMPs allow for more affordable debt repayment, but the debt has to be paid in full, and it can take longer than other debt solutions.

Bankruptcy

Bankruptcy is a legal process in which an individual declares themselves unable to meet their financial obligations, and seeks to have their debts written off.

It involves the liquidation of assets to repay creditors, and the individual is typically discharged from the included debts after 12 months. They may have to make regular payments for longer than 12 months depending on their financial situation.

Bankruptcy can offer a financial fresh start, but has significant long-term consequences, including damage to credit rating and the potential loss of valuable assets. It should be considered as a last resort when other debt solutions are unavailable.

Debt Relief Order

A Debt Relief Order (DRO) is a formal insolvency process available in the UK for individuals with limited income, minimal assets, and debts below a specific threshold. It provides relief from debt for those who meet the criteria, giving them 12 months to improve their financial situation.

During this period, creditors can’t pursue debt repayment. If the individual’s debts remain after 12 months, then the associated debts will be written off.

DROs are a cost-effective way for people facing financial hardship to regain control of their finances, however there are strict eligibility requirements, including an upper debt limit and restrictions on assets.

Protected Trust Deed

A Trust Deed in Scotland is a formal, legally-binding debt solution for individuals facing unmanageable unsecured debts. It typically lasts for four years, during which you make affordable monthly payments to a Trustee who then distributes the funds to your creditors. At the end of the Trust Deed term, any remaining included debts are usually written off. This arrangement provides protection from legal actions by creditors and offers a structured path to dealing with unaffordable debts. It will have implications for your credit rating, however, and may require you to release equity from your home if you have substantial equity in the property.

Debt Arrangement Scheme

The Debt Arrangement Scheme (DAS) is a government-created debt management programme available in Scotland. It allows individuals to consolidate multiple unsecured debts into a single, affordable monthly payment plan without the need for formal insolvency proceedings. DAS provides protection from legal actions by creditors and freezes interest and charges on included debts. It allows people to regain control of their finances while addressing their obligations responsibly. Taking part in the Debt Arrangement Scheme will have an impact on your credit rating, and may make it difficult to access new lines of credit for a period of time afterwards.

Sequestration

Sequestration, also known as bankruptcy, is a formal legal process for individuals in Scotland who are unable to repay their unsecured debts. It involves the surrender of assets to a Trustee, who can sell them to repay creditors. After a period of one year, any remaining debts are discharged, providing the individual with a fresh financial start. Sequestration is often seen as a last resort due to its significant consequences, including damage to credit ratings and potential asset loss. It may be suitable for those with overwhelming debt and no other viable way to repay money owed, but you should always seek professional debt advice before taking this step.

Minimal Assets Process

The Minimal Assets Process (MAP) is a simplified form of bankruptcy available in Scotland for individuals with very limited income, little or no assets, and a level of unsecured debts they cannot repay.

It is designed for those facing extreme financial hardship and typically lasts for six months. During this period, creditors cannot pursue repayment of the included debts, and these debts are discharged at the end of the MAP.

While the Minimal Asset Process offers a route to debt relief, it has significant consequences, including damage to credit ratings, and any applicant will need to meet strict eligibility criteria in order to qualify.

England, Wales & N.Ireland

Individual Voluntary Agreement

An Individual Voluntary Arrangement (IVA) is a legally-binding debt solution in the UK. It allows individuals with substantial unsecured debts, typically £6,000 or more, to consolidate their debts into manageable payments over a fixed term, usually five to six years.

IVAs are ideal for those facing financial hardship but wanting to avoid bankruptcy. To qualify, you must owe money to at least two creditors, be a resident of England or Wales, and have a steady income to make monthly payments.

After successful completion, any remaining unsecured debts are typically written off, providing a fresh financial start.

Debt Management Plan

A Debt Management Plan (DMP) is a flexible debt solution for people facing unsecured debts they can’t afford to repay at once. It typically involves negotiating with creditors to make reduced monthly payments over a longer period of time, often via a DMP provider.

This informal agreement helps individuals regain control of their finances without the legal obligations of more formal arrangements. However, it doesn’t provide the same legal protections as solutions like an Individual Voluntary Arrangement (IVA).

DMPs allow for more affordable debt repayment, but the debt has to be paid in full, and it can take longer than other debt solutions.

Debt Relief Order

A Debt Relief Order (DRO) is a formal insolvency process available in the UK for individuals with limited income, minimal assets, and debts below a specific threshold. It provides relief from debt for those who meet the criteria, giving them 12 months to improve their financial situation.

During this period, creditors can’t pursue debt repayment. If the individual’s debts remain after 12 months, then the associated debts will be written off.

DROs are a cost-effective way for people facing financial hardship to regain control of their finances, however there are strict eligibility requirements, including an upper debt limit and restrictions on assets.

Bankruptcy

Bankruptcy is a legal process in which an individual declares themselves unable to meet their financial obligations, and seeks to have their debts written off.

It involves the liquidation of assets to repay creditors, and the individual is typically discharged from the included debts after 12 months. They may have to make regular payments for longer than 12 months depending on their financial situation.

Bankruptcy can offer a financial fresh start, but has significant long-term consequences, including damage to credit rating and the potential loss of valuable assets. It should be considered as a last resort when other debt solutions are unavailable.

Scotland

Protected Trust Deed

A Trust Deed in Scotland is a formal, legally-binding debt solution for individuals facing unmanageable unsecured debts.

It typically lasts for four years, during which you make affordable monthly payments to a Trustee who then distributes the funds to your creditors. At the end of the Trust Deed term, any remaining included debts are usually written off.

This arrangement provides protection from legal actions by creditors and offers a structured path to dealing with unaffordable debts. It will have implications for your credit rating, however, and may require you to release equity from your home if you have substantial equity in the property.

Debt Arrangement Scheme

The Debt Arrangement Scheme (DAS) is a government-created debt management programme available in Scotland. It allows individuals to consolidate multiple unsecured debts into a single, affordable monthly payment plan without the need for formal insolvency proceedings.

DAS provides protection from legal actions by creditors and freezes interest and charges on included debts. It allows people to regain control of their finances while addressing their obligations responsibly.

Taking part in the Debt Arrangement Scheme will have an impact on your credit rating, and may make it difficult to access new lines of credit for a period of time afterwards.

Sequestration

Sequestration, also known as bankruptcy, is a formal legal process for individuals in Scotland who are unable to repay their unsecured debts. It involves the surrender of assets to a Trustee, who can sell them to repay creditors.

After a period of one year, any remaining debts are discharged, providing the individual with a fresh financial start.

Sequestration is often seen as a last resort due to its significant consequences, including damage to credit ratings and potential asset loss. It may be suitable for those with overwhelming debt and no other viable way to repay money owed, but you should always seek professional debt advice before taking this step.

Minimal Assets Process

The Minimal Assets Process (MAP) is a simplified form of bankruptcy available in Scotland for individuals with very limited income, little or no assets, and a level of unsecured debts they cannot repay.

It is designed for those facing extreme financial hardship and typically lasts for six months. During this period, creditors cannot pursue repayment of the included debts, and these debts are discharged at the end of the MAP.

While the Minimal Asset Process offers a route to debt relief, it has significant consequences, including damage to credit ratings, and any applicant will need to meet strict eligibility criteria in order to qualify.

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