What kind of debt problems are you facing?
I can no longer afford my agreed payments
A debt management plan could be the ideal way of reducing your unsecured debt payments to a level you can afford - with expert help and advice along the way.
- Negotiate with your unsecured lenders for lower monthly payments. These will mean it will take longer to repay your debts, and may cost you more in interest.
- Deal with any phone calls and letters from your lenders - although they may still contact you directly.
- Give you any expert advice you need while your plan is in place
If you're in this situation and you live in Scotland, the Debt Arrangement Scheme (DAS) could also help you reduce your payments to a level you can afford.
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I want to make my finances simpler
A debt consolidation loan combines multiple debts into one - giving you one affordable payment to keep on top of per month.
Consolidating your debts means:
- You'll have just one payment to budget for every month
- You'll deal with just one lender - there may be a fee for arranging your loan
- You'll be able to arrange payments you can afford, but if you use your home as security for the loan it may be at risk if your fall behind with repayments.
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I can't afford to repay what I owe in a realistic amount of time
An IVA (Individual Voluntary Arrangement) could be a way to repay what you can afford towards your unsecured debts - and write-off whatever you can't on successful completion.
If you enter an IVA, you will:
- Commit to make a reduced payment per month, calculated to leave enough room for your essentials
- If you're a homeowner, your house will be protected - though you may need to release some equity during the final year
- Have a date you'll be free of your debts - usually after 5 years. However, if your IVA fails then you may face bankruptcy
If you're a Scottish resident, a Trust Deed could help you in much the same way - though in most cases, a Trust Deed only lasts for four years but can be extended if you are unable to release equity in your home.
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I have a low income and few assets - and can't afford to pay my debts
A DRO (Debt Relief Order) could provide the best way of getting back on top of your debt problems if you can't afford to repay what you owe - and you also have a limited income and few valuable assets.
If you enter a DRO, you will:
- Have your monthly unsecured debt payments frozen for a year
- Be protected from any further action from your unsecured lenders
- Have the portion of the debt you can't afford written off after 12 months
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I simply can't afford to repay what I owe
If you find that you simply can't afford to repay your debts in any kind of timeframe, bankruptcy could be the answer.
Going bankrupt is a serious step to make and means:
- You'll have a date you'll be free of your debts - typically after a year - but you will probably have to use many of your assets, including your home, to repay your lenders
- You'll be protected from your lenders, but your name will appear on the Individual Insolvency Register
- You'll have a 'light at the end of the tunnel' for your debt problems, though your credit rating will be seriously affected for six years
If you live in Scotland, and you need to go bankrupt but your lenders have yet to take action, the LILA (Low Income, Low Assets) route into bankruptcy could be your best approach.
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I don't know how to deal with my debts
Losing control of your finances can be difficult to face - but easily done. If you're struggling to cope with your debts but you aren't sure how to tackle them, getting some advice could really help you.
We provide expert advice without any obligation - so you can be confident you're getting the help you need from a company you can really trust.
Speak to one of our experts on 0800 195 2911 or leave your details with us and we'll get back to you.
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Download the Insolvency Service document "In Debt? Dealing with your creditors" here.
Download Scotland's Insolvency Service document "Debt advice and information package" here.