What are Debt Claims (It’s not an IVA)
A service provided by the combined expertise of an excellent administrative system, a Chartered accountancy and a Lawyer to help normal people who, for whatever reason, are now struggling with the constraints of debts.
We all now appreciate more so than ever before, how situations and circumstances out of our control, can have a dramatic effect on our lives and this includes our finances.
Debt is one of the biggest causes of stress because not only do we have to deal with lifestyle changes or events, but the lenders behind debt are also very quick to start the harassment resulting in chasing and threats of collectors, court and even bailiffs.
There are options available but these are limited and not always the ideal solution.
What are the options?
DEBT MANAGEMENT PLAN (DMP)
A DMP is an informal agreement between you and your creditors for paying back your non-priority debts. Non-priority debts are things like credit cards, loans and store cards. You pay back the debt by one set monthly payment, which is divided between your creditors. Most DMPs are managed by a DMP provider who deals with your creditors for you. This means you don’t need to deal with your creditors yourself.
An IVA (Individual Voluntary Arrangement) is a formal and legally binding agreement between you and your creditors to pay back your debts over a period of time. This means it’s approved by the court and your creditors have to stick to it. An IVA can be flexible to suit your needs but it can be expensive and there are risks to consider.
Bankruptcy is a legal status that usually lasts for a year and can be a way to clear debts you can’t pay. When you’re bankrupt, your non-essential assets (property and what you own) and excess income are used to pay off your creditors (people you owe money to). At the end of the bankruptcy, most debts are cancelled.
Thankfully there is now a new option that we believe is better value, less restrictive and provides a clear plan to not just relieve the stress and harassment but reach a conclusion with limited damage and recourse to you and your life
What are the disadvantages of an IVA?
There are many, including:
- Spending restrictions are put in place during an IVA
- Not all debts can be included in an IVA, for example student loans, child support and maintenance, magistrate court fines, and social fund loans, but an allowance can be given to enable you to continue repaying these
- Creditors may not approve your IVA
- If you are a homeowner, you may have to release equity in the final year of the IVA through re-mortgaging. If you can’t remortgage, your arrangement could be extended for up to 12 months in lieu of the equity available in your property
- Should you become entitled to any windfalls or inheritance money over and above £500 during the term of the IVA, these funds will have to be introduced into the arrangement
And still more
- If you fail to make the payments due under the terms of your IVA, your arrangement could fail
- If your circumstances change, the insolvency practitioner can ask creditors to agree to an amended offer, however if creditors refuse to accept amended terms, the IVA may fail. You may then still owe your creditors the amount that you owed at the outset of the IVA
- If your IVA fails, it could lead to you being made bankrupt
- IVAs are recorded on the Insolvency Register, which is a public register
- An IVA remains on your credit file for six years after it is accepted and may have a negative effect on your credit score for up to six years
The problem with IVA is that all the accountability is placed on the victim – that’s you. So the resolution is also completely biased against you, taking no consideration for circumstances that may have led you to being in the position.
Is there a better solution to debt than an IVA?
Yes, the Debt Claims way
Debt Claims is a process whereby we will evaluate the debt itself, look into the source, reasons how and why the debt occurred and the reason you are now struggling.
We work with you to resolve the debt problem in fair way to ensure you are not penalised further because of the circumstances you have found yourself trapped in.
This process has distinct advantages over the IVA –
- Only 36-month term.
- Overall cheaper solution to reach debt free
- No restrictions
- No Windfall clause
- Free to start rebuilding credit within 6 months
- Quicker resolve with creditors
- Not registered on Insolvency register so not hanging round your neck for 6 years
Yes, we want you to take some responsibility and you will of course negotiate your fair share of payment to resolve the matter
How does it work?
- We carry out a fact find with you to establish the debts, balance and lender details.
- Evaluate your financial position and do a budget planner to work out how to help you get on track covering monthly costs and living costs without the constant threats and harassment from lenders .
- Instruct our legal team who will inform the lenders we are now working for you to resolve those debts.
- We’ll agree terms based on what your monthly disposable income is and set up one monthly payment that is affordable to you without the constraints.
- If you make those payments for 36 months, and as long you maintain that we will continue to resolve the debt issues.
- There are no restrictions imposed like an IVA
- You are free to go about your life and with are help start repairing your credit as soon as possible, meaning there is light at the of the tunnel
- This is not registered in a public domain like the Insolvency Register so not shame or stigma, its private and we believe it should stay that way.
- At the end, it means its finished, no roll over concerns that its can still hang around your neck for years to come
Who qualifies for Debt Claims?
Unlike other plans, this is not an IVA. We use the combined expertise of a Chartered Accountant and a Lawyer supported by an administration team who will evaluate and assess your personal and individual circumstances. We’re then able to confirm if the plan is right for you and will work for you. We have an initial criteria that confirms your eligibility.
- Over £5000 worth of unsecured debt
- You must have 2 or more creditors of 2 or more lines of credit
- Live in England, Wales or Northern Ireland
- Be insolvent (this means you are in arrears with debts)
- Must be willing to pay the agreed fee
- Have some type or types of regular income
What debts can be included
- Credit card debt/credit cards
- Loans/loan debt
- Payday loans
- Council tax arrears
- HMRC debt
- Overpaid benefits
- Gas and electricity arrears
- Overdrafts/overdraft debt
- Water arrears
- Income tax arrears
- Debts to friends and family
- Other unsecured debts
What debts can’t be included
- Secured loans
- Your mortgage (if you still live in the house)
- Car finance (if you still have the car)
- Rent arrears for your current property
- Court fines/Police fines
- Hire purchase arrears (if you still have the product)
- Log book loans (if you still have the vehicle that the debts are secured on)
- Student loans
- Other secured debts
What is the Debt Claims process
Where do we start?
After we confirm you qualify, and you decide to proceed we first need to ensure we gather all the correct information. This includes your details, home status, employment and living status.
We can then collate all the debt info and the more you can provide the easier and quicker the process is.
Once we have all the info along with your complete monthly budget planner, we can put together the proposed plan based on income, outgoing, consideration for allowable expenses and living costs. What’s left is what we agree to be your disposable income.
(Income – Outgoings – Net of debt costs = disposable income = plan formatted)
What happens next?
Basically, we take the costs of all the combined relevant debts x the amount you’re actually paying towards them. Then we’ll agree an affordable figure that is paid into the plan.
Once the plan is agreed and the set-up costs of £295 paid, we are then able to start your plan.
Finally, we can then deal with the lenders and debt collectors resulting in us taking away the stress and hassle from you.
We work with you over the 36-month duration of the plan. As a result at the end your plan you are free again to move on with your life.
FIND OUT IF YOU QUALIFY FOR HELP IN SECONDS
Where else can you get help?
The Money Advice Service, is an independent service set up by government to help people make the most of their money. They give free, unbiased money advice online, on webchat, over the phone, in printed guides or face to face. Advice on managing money, reduce borrowing, money savings, universal benefits, credit benefits and much more.