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Frequently Asked Questions

This page includes the questions most commonly asked about debt management plans, individual voluntary arrangements, trust deeds, bankruptcies and answers to these questions. The information provided may answer your questions but if it does not, please contact us.

Debt Management

What is a Debt Management Plan?

A Debt Management Plan is a solution that allows you to consolidate debts into one, easier to manage monthly repayment plan.

If you’re struggling to keep up with repayments, a Debt Management Plan is an effective way for you to get back on track and reduce repayments so that they’re more affordable within your budget.

Repayments are based on what you can realistically afford after all your other household bills have been taken into account.

Will I be charged if I cancel my plan?

No, you will not be charged for cancelling a Debt Management Plan. Simply speak to a member of the team if you wish to cancel.

Do lenders always accept reduced payment offers?

Be confident that the proposed payment is based on what you can realistically afford to pay towards your debt balances. We will also request that your lenders freeze interest and charges on your debts, so your debts can only reduce. In the majority of cases we manage we are successful in this.

What if my lenders keep chasing me for payments?

Although we cannot guarantee that lenders will stop contacting you completely, we will do all we can to reduce this contact as much as possible. While we are setting up your plan, we’ll let your lenders know that we are working on your behalf. This means your lenders will start communicating with us directly.

However, if lenders continue to contact you, please do not ignore their letters or calls, please ask them to contact us instead and we will handle their questions.

Will the Plan stop my lenders taking further action?

Debt Management Plans are not legally binding, therefore a lender could still take court action to recover debts – it really depends on each individual lender. That said, many lenders will not take further action to recover the debt as they are receiving regular monthly repayments based on what you can afford to pay. Being part of a structured repayment plan will also show your lenders that you are making every effort possible to clear your debts.

If you get a letter regarding further debt recovery action, please contact us straightaway and we will do all we can to help.

Will I receive a Default Notice?

Lenders will send a Default Notice because you have defaulted on your original credit agreement. Because you are not repaying your debt at the amount you originally agreed with your lenders, you could receive a Default Notice while on a Debt Management Plan, this is to protect their own legal position.

Will my credit rating be affected?

If you have already struggled to make repayments on time or have missed them altogether, your credit rating may already be affected. With a Debt Management Plan your credit rating will be affected in the medium term because you will not be repaying your debts at the rate you originally agreed with your lenders.

It is also worth noting that if you have been issued a default notice during the period of the Debt Management Plan, this will remain on your credit record for six years from the date the notice was issued.

Do I have to be in full time employment to get a Debt Management Plan?

No – we will carry out a financial review to find out if a Debt Management Plan is the right solution for you first. This is what the decision is based on, not whether you are in full time employment, self employed or working part time.

Our financial reviews are under no obligation, so if you’re interested in finding out whether it would be the best way for you to deal with your debts, please contact us; we’ll be happy to help.

How long will the plan take?

The repayment length of your plan will depend on how much debt you have and how much you can realistically afford to repay each month. As you will not be repaying your debts at the rate originally agreed with your lenders, it will take longer to repay your debts with a Debt Management Plan.

While this is not an overnight solution, you will have the peace of mind knowing that you are repaying your debts at a rate you can afford and you will be free from unsecured debts at the end of the Plan.

A Debt Management Plan is a flexible solution, so if your circumstances change and you wish to increase repayments and clear your debt in a shorter amount of time, you can.

What if I am not happy with the service?

We aim to provide a professional service at all times. However, if you are unhappy with the service that you have received, please contact our customer service team or follow our Complaints Policy explaining why you feel that your expectations have not been met.

Individual Voluntary Arrangement

What is an IVA?

An Individual Voluntary Arrangement (IVA) is a solution that’s designed to help people repay their debts at a rate they can afford. It is a legally binding agreement between you and your lenders and providing you keep to the terms of the IVA, lenders will agree to write off any remaining debts that still exist at the end of the IVA period, which typically lasts for 5 years.

Interest and charges will be frozen and lenders will no longer be able to contact you or petition for your Bankruptcy.

An IVA is available if you reside in England, Wales and Northern Ireland.

Does an IVA cover all of my debts?

No, only unsecured debts – debts that are not secured against your property or something you own – can be included in an IVA.

These would include debts such as credit cards, overdrafts, personal loans, payday loans, store cards and catalogue accounts.

How long will the IVA last?

Providing you keep to the terms of the IVA, the Arrangement will typically last for 5 years.

How much does an IVA cost?

To see specific breakdown of our fee structure for all of our services, please take a look at our "Our Fees" page.

All costs associated with your IVA are included in the payments you make in to it every month. Your Insolvency Practitioner will tell you what these specific fees are before you commit to an IVA.

What happens the interest and charges while the IVA is being set up?

Interest and charges are frozen once the IVA starts – not during the set up of the IVA.

Will an IVA stop my creditors taking further action?

Yes. Once the IVA is in place, you are protected from all further recovery action by your unsecured lenders – providing you keep to the terms of the arrangement.

If a lender tries to take further action while the IVA is being set up, you can apply to the courts for an Interim Order to stop this until you know the outcome of your application.

Do lenders have to accept an IVA?

Once we have all the details regarding your financial circumstances, your case will be transferred to an Insolvency Practitioner for further assessment.

Based on this information, the Insolvency Practitioner will draft a proposal which will be presented to your lenders.

For an IVA to be approved and interest and charges to be frozen, the proposal will need to be voted on and approved by lenders representing 75% of the value of your debts.

If 75% approval is not obtained, then the IVA proposal will fail.

Will it affect my credit rating?

If you have already made late payments towards your debts or missed them altogether, then your credit rating could already be affected.

If you enter an IVA, you will not be repaying the amount originally agreed with your lenders, which means your credit rating will be affected for six years from the start of the Arrangement. Once all your debts are cleared, you will be able to focus on rebuilding your credit rating once again.

Can I cancel the IVA once it has been set up?

You may cancel your IVA application. However, once the IVA begins and you have started making the repayments, you cannot cancel the IVA as it is a legally binding agreement. If there are changes to your financial situation, you should speak to your Insolvency Practitioner who will be able to advise you on what to do next.

What happens if I stop paying my IVA?

If you fail to keep to the Arrangement and the IVA falls so much into arrears that nothing can be done to bring it back on track, then the IVA Supervisor will issue a Notice of Termination. This will formally bring an end to the IVA.

If the IVA fails then the lenders will be able to chase you for the remaining debt, as you will no longer have the protection afforded to you by the IVA. There is also the risk that lenders or the Insolvency Practitioner could petition for your Bankruptcy.

What happens if my IVA is not approved?

If the IVA is not approved we will do all we can to help you find an alternative solution, such as a Debt Management Plan.

Protected Trust Deed

What is a Trust Deed?

A Protected Trust Deed is a solution that’s designed to help people living in Scotland repay their debts at a rate they can afford. It is a legally binding agreement between you and your lenders and providing you keep to the terms of the Deed, lenders will agree to write off any remaining debts that still exist at the end of the Deed period, which typically lasts for 4 years.

Interest and charges will be frozen and lenders will no longer be able to contact you or petition for your Sequestration (Bankruptcy).

Does a Trust Deed cover all of my debts?

No, only unsecured debts – debts that are not secured against your property or something you own – can be included in a Trust Deed.  These would include debts such as credit cards, overdrafts, personal loans, payday loans, store cards and catalogue accounts.

How long will the Trust Deed last?

Providing you keep to the terms of the Trust Deed, the Arrangement will typically last for 4 years.

How much does a Trust Deed cost?

To see specific breakdown of our fee structure for all of our services, please take a look at our "Our Fees" page. All costs associated with your Trust Deed are included in the payments you make in to it every month. Your Insolvency Practitioner will tell you what these specific fees are before you commit to a Trust Deed.

What happens the interest and charges while the Trust Deed is being set up?

Interest and charges are frozen once the Trust Deed starts, when it becomes ‘Protected’ – not during the set up of the Trust Deed.

Will a Trust Deed stop my creditors taking further action?

Yes. Once the Protected Trust Deed is in place, you are protected from all further recovery action by your unsecured lenders – providing you keep to the terms of the arrangement.

If a lender tries to take further action while the Trust Deed is being set up, you can apply to the courts for an Interim Order to stop this until you know the outcome of your application.

Do lenders have to accept a Trust Deed?

Once we have all the details regarding your financial circumstances, your case will be transferred to an Insolvency Practitioner for further assessment. Based on this information, the Insolvency Practitioner will draft a proposal which will be presented to your lenders. For a Trust Deed to be approved and interest and charges to be frozen, the proposal will need to be voted on and approved by lenders representing 75% of the value of your debts. If 75% approval is not obtained, then the Trust Deed proposal will fail.

Will it affect my credit rating?

If you have already made late payments towards your debts or missed them altogether, then your credit rating could already be affected. If you enter a Trust Deed, you will not be repaying the amount originally agreed with your lenders, which means your credit rating will be affected for four years from the start of the Arrangement. Once all your debts are cleared, you will be able to focus on rebuilding your credit rating once again.

Can I cancel the Trust Deed once it has been set up?

You may cancel your Trust Deed application. However, once the Trust Deed begins and you have started making the repayments, you cannot cancel the Trust Deed as it is a legally binding agreement. If there are changes to your financial situation, you should speak to your Insolvency Practitioner who will be able to advise you on what to do next.

What happens if my Trust Deed is not approved?

If the Trust Deed is not approved we will do all we can to help you find an alternative solution, such as a Debt Management Plan.

Bankruptcy

How do I declare myself bankrupt?

Your lenders may file a Bankruptcy petition (Creditor’s Petition) if you owe them more than £750.

However, in order for you to declare yourself bankrupt you must firstly fill in a Bankruptcy Petition (Debtor’s Petition).

Once the petition has been filed, a court date will be set for an initial hearing. This first hearing will decide whether or not a Bankruptcy Order should be made. If a Bankruptcy Order is made, you will be declared bankrupt.

A Bankruptcy Order can still be made even if you refuse to acknowledge or agree to the order. Therefore you should try to co-operate fully once the Bankruptcy proceedings have begun. If you dispute the lender(s) claims you should try and reach a settlement with them before the Bankruptcy Order is made, as trying to do so afterwards is difficult and expensive.

How much will it cost?

If you go bankrupt you may have to pay the following:

  • The Court Fee of £180 (if you receive means tested benefits you may be exempt or be able to pay a reduced fee).
  • The Official Receiver Fee or Deposit of £525
  • If you are a couple and are both applying for Bankruptcy, you will each have to pay separate fees.

We do not administer bankruptcies, however we are able to give you guidance and identify if there may be a better option.

You can get free debt advice from the Money Advice Service – an organisation set up by the Government to offer free and impartial advice to those in debt. Click here for more information.

Are there other options to bankruptcy?

Bankruptcy is probably one of the most well-known forms of debt help because it is often talked about in the press, which is why many people assume it’s the only way to get out of debt. For some people, Bankruptcy is the right option, but it is one of the most severe options available so you should always find out if your debt problems could be resolved with a solution such as a Debt Management Plan, IVA, Protected Trust Deed, or Debt Relief Order.

What will happen to my assets in bankruptcy?

You can keep any tools, books, vehicles (if low value) and other items of equipment needed personally in your employment or business. You will also be able to keep your clothing, bedding, household furniture, basic household items and certain pension entitlements. You will lose control of larger assets, such as your home, as these will be sold to raise money to repay your creditors.

What will I have to do if I go bankrupt?

When you go bankrupt, you must provide information about your financial affairs – handing over control of your assets, bank statements and insurance policies to the Official Receiver. You may have to attend court to explain why you’re in debt.

You are not allowed to make any direct payments to your lenders. Any bank, building society accounts, credit cards or similar must no longer be used. You can get free debt advice from the Money Advice Service – an organisation set up by the Government to offer free and impartial advice to those in debt. Click here for more information.

We could help you reduce your debt by up to 80%