FAQs
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FAQs
Debt Management Plan (DMP)
How long does a DMP last?
This depends on the amount of debt and disposable income that you are able to make. You will have to repay all of the debt in a debt management plan, however you may not have to pay any future interest or charges.
What effect will a DMP have on my credit rating?
If you are not making your contractual monthly payments to your creditors it is likely that your credit rating has already been affected. A debt management plan will not make your credit rating worse than it currently stands.
Do my creditors have to accept the payments I offer them?
No, they don't have to accept the offer however our proposal will highlight the financial difficulty that you currently face. This should influence your creditors to freeze interest and charges to enable you to clear your debt.
Full & Final Settlement
What is a Full & Final Settlement?
A Full & Final Settlement is a where a creditor will agree to clear up to 40% of unsecured debt on the basis that they are getting a one off payment of at least 60% of the debt.
Why would my creditors accept a lower amount in Full & Final Settlement?
Your creditors will only accept a reduced payment if you can demonstrate that you can no longer maintain your contractual payments. You must also prove that the amount being offered is the maximum amount that you can afford to pay, or the maximum funds available.
Will I lose my house if I enter into a Full & Final Settlement?
No, your house will not be at risk by completing a Full & Final Settlement. If you have to release equity from your home to make the lump sum payment then you will have to maintain this added cost or you could risk losing your house.
Protected Trust Deed
What is a Protected Trust Deed?
A Trust Deed is an alternative to Sequestration. It is a proposal between you and your creditors, administered by a licensed Insolvency Practitioner. You must be able to pay at least £200 every month towards your Trust Deed and have unsecured debts of at least £10,000.
How long will the Protected Trust Deed last?
The Protected Trust Deed will usually last for 3 years.
Will I lose my house if I enter into a Protected Trust Deed?
Usually you will be able to keep your house. If you have equity then this will be taken into account and may need to be released and for the benefit of your creditors. If the property is joint-owned, then an appropriate portion of the equity will be realised.
Individual Voluntary Arrangment
How long does an IVA last?
An IVA normally lasts for five years.
Will my IVA always be accepted?
If 75% by value of your creditors who are represented at the meeting vote in favour then your IVA will be accepted. Creditors are able to put forward changes to your proposal but you can decide whether or not they are acceptable.
What happens once I finish paying my IVA?
At the end of the process the Insolvency Practitioner will issue you with a 'Statement of Completion', typically within 3 months of the final payment. The Insolvency Practitioner will also send a copy of this to the Insolvency Service so that they can amend their records.
Will I get to keep my house if I enter an IVA?
Normally you would get to keep your house, although you would have to release any equity within your property to contribute to your IVA. Any other assets would have to be realised too.