Personal debt solutions in England & Wales

Getting you back in control of your finances

We’ll start by helping you draw up a realistic and sustainable budget, before explaining all of the options available to tackle your debt. We will explain all of the pros and cons of each option to ensure you can make an informed decision. You select the one that suits you best.

You can find details of each option available to residents in England and Wales below.

Debt Management Plan (DMP)

What it is:  A Debt Management Plan is a non- legally binding repayment plan that allows you to repay your debts at an affordable amount over a longer period of time.

How it works: You make one affordable monthly payment which is then paid to your creditors on a pro-rata basis. Under a DMP, you will pay back all of your debts. 

Using a DMP will impact your credit file.

It will not stop debt collection or legal action and your debts may increase.

Is this for you? This may be a suitable option if you have some disposable income that you can afford to pay over a period of time and if you own a lot of assets or equity in your home which you do not want to put at risk.

Cost: There is a fee payable for this service.

Individual Voluntary Arrangement (IVA)

What it is:  An IVA is a form of personal insolvency administered by an Insolvency Practitioner (for example, Johnston Carmichael) on behalf of your creditors, i.e. those you owe money to.

Under this arrangement you normally make one affordable monthly payment which is then (after fees) distributed to your creditors on a pro-rata basis. You can also realise assets and pay for it that way, or a use a mixture of both.

An IVA will stop debt collection and legal action being taken against you.

How it works:  You make 60 (or more) affordable monthly payments and the rest of your debts are written off.

An IVA will impact your credit file and your assets may be at risk.

Is this for you? This may be a suitable option if you have some disposable income which you could pay over a five - year period, or longer, and little or no assets.

Cost: There is no extra fee payable for this service, only your monthly contribution.

Bankruptcy

What it is:  Bankruptcy is a form of personal insolvency, administered by the Insolvency Service, on behalf of your creditors i.e. those you owe money to.

Under this option you may have to make a contribution from your income and your assets may be at risk.

Bankruptcy will stop any debt collection or legal action being taken against you.

How it works: You make regular monthly payments (if you can afford to) over a 36 - month period and the rest of your debts are written off.

Applying for bankruptcy will impact your credit file and your assets may be at risk. It may also impact your employment and immigration status.

Is this for you? This may be a suitable option if your debts are un-manageable, or you have some (or no) disposable income which you could pay over a three-year period and have little or no assets.

If your debts are under £20,000, a Debt Relief Order may be more suitable.

Cost: There is a fee of £680 for this option.

Debt Relief Order (DRO)

What is it? A DRO is another form of insolvency that may be an option for you if you have debts of less than £20,000, no or little disposable income, no or little assets and do not own your own home.

How it works: After the period of the DRO, normally one year, your debts will be written off.

A DRO will stop debt collection and legal action being taken against you. To apply for a DRO you will have to take advice from an approved intermediary. Applying for a DRO will  impact your credit file.

Is this for you? If you have unmanageable debts of under £20,000, disposable income of under £50 per month and do not own your home, this may be an option for you.

Cost: There is a fee of £90 for a DRO.

Get in touch with our advisers

When it comes to confronting a debt problem, a problem shared, really is a problem halved.

To find out more about how we can work with you, please contact our Money Advice Team for an initial chat on 0800 111 4071 (freephone) or at: moneyadvice@jcca.co.uk.

Johnston Carmichael is authorised and regulated by the Financial Conduct Authority. FRN 809465.

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