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Debt Help
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Our Debt Advisors are here to help. See our opening times and let us know when you would like us to call you.

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Testimonials

Mrs Smith asked for help with £44,000 of debt and was recommended an IVA. Now in her IVA Mrs Smith makes a monthly payment of £269 and will repay £16,140. That’s just 37% of her original debt.

“I am back in control with great support that’s just a phone call away. My future has never looked brighter.”

Mrs Smith


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Bankruptcy Explained

Bankruptcy is a serious matter which can have enduring implications for your finances and should always be a last resort. Alternative solutions such as an IVA or Debt Management Plan are much less drastic and should be considered first.

Here at Moneyextra we provide advice on all areas of debt; we understand that debt is a daunting experience and that you need to know about all the solutions available to you. We are here to discuss your worries, concerns and current circumstances; we can then provide you with advice about how to avoid bankruptcy and details of alternative solutions. Our fully trained debt advisors are available to take your call and answer any questions you have. You can call us on:

0800 093 3537 or complete our Debt Test

Bankruptcy protects you from your creditors and allows you to start afresh but it does have serious implications. It allows your creditors to sell your assets and the money raised is then used to repay the debts owed to your creditors. Assets could include life insurance, pensions and you would probably have to sell your house.

Once bankrupt your bank account will be closed and any previously agreed credit stopped. Your landlord will be informed; your name will be published on the insolvency service register and in your local newspaper. For certain professions bankruptcy could put you at risk of losing your job.

Bankruptcy Details

Advantages Disadvantages
  • The period of time for you to repay your debt is limited.
  • Legal protection is provided in respect to your debts.
  • You will have to pay £475 to petition for bankruptcy.
  • Your bankrupt status will be publicised in the local Press. It is also available if anyone wishes to request information about you.
  • You are subject to the control of the court.
  • You face the loss of your home and assets with exception of any assets deemed necessary to satisfy your working needs.

Bankruptcy Alternatives

Individual Voluntary Arrangement (IVA)

Advantages Disadvantages
  • Lasts for a fixed period (usually five years).
  • You pay a monthly payment that you can realistically afford for usually 60 months.
  • You are allowed to open a regular bank account with no overdraft facility so you are in control of your finances.
  • An IVA protects your home from legal action and unsecured creditors cannot force you to sell your home.
  • Your creditors will stop calling you and sending you letters.
  • You are not allowed to borrow during your IVA.
  • If you fail to keep to the terms of the IVA your creditors can resume collection actions.
  • If you have equity in your house (i.e. it is worth more than you paid for it) you will have to make best endeavors to remortgage towards the end of your IVA and release funds to your creditors.
  • The IVA normally stays on your credit history for one year after your IVA ends. This may affect your credit rating although some lenders view your proven ability to make regular payments over 60 months favorably.

For more IVA advice and the benefits of an IVA over Bankruptcy please see our IVA page or ask one of our trained debt advisors a question now via live chat.

Debt Management Plan

Debt Management Advantages Debt Management Disadvantages
  • A DMP is an informal arrangement that avoids the need for formal insolvency procedures such as an IVA or bankruptcy.
  • By reaching agreement with your creditors a DMP may suspend actions against you such as CCJ's (County Court Judgments).
  • Creditors will, in many cases, freeze interest payments and your monthly debt repayments may be reduced.
  • The arrangements are informal. Your creditors can change their mind at any time.
  • Interest will usually continue to be charged on your debts particularly on your arrears which may be charged at higher rates than your original loan rate.
  • Your credit rating may still be harmed.

If you would like to know more about Debt Management Plans please see our Debt Management page or complete our Debt Test.

You may find additional information in the debt sections on the following websites useful reading:

Debt Free Direct

Debt Free Direct has been providing UK residents with debt advice since 1997 and is the leading provider of confidential, specialist advice on serious problems. We can help you discover more about IVA and Debt Management and other financial solutions and advice.
http://www.debtfreedirect.co.uk/

Consumer Credit Counseling Service (CCCS)

Debt help is available online now with no commitment.

www.citizensadvice.org.uk/cabdir.ihtml

Citizens Advice

Citizens Advice Bureau offers free, confidential, impartial and independent advice. Your local Citizens Advice Bureau is listed in the phone book.

www.citizensadvice.org.uk/cabdir.ihtml

National Debtline

The helpline that provides free confidential and independent advice on how to deal with personal debts.

www.nationaldebtline.co.uk