There are many companies advertising lots of different debt solutions, such as debt management plans, IVAs, bankruptcy, loan consolidation…the list goes on and on. But the question is, what would work for you and how can you be sure that the person you’re talking to is thinking about your best interests, not their profits?
More often than not, if you go to a specialist debt management company for help, you’ll be offered a debt management plan, even if it takes you 20 years to pay off your debts. Bad debt advice can often lead to an already difficult situation spiraling out of control.
Even if you think you’ve found a debt solution that will work for you, do you know how long it will last, will it affect your employment, will it affect your credit rating, is it legally binding on all your creditors, does it prevent your creditors from taking further action against you, will your home be at risk and will you have to pay a fee?
The most important thing to remember is that there is no single ‘right answer’ to debt - there is only the best solution for your circumstances. Whether you owe £1,000 or £50,000, whether you own your home or rent, and whether you're employed or out of work right now, all of these things affect which solution is best for you.
Debt Advice Foundation’s trained advisors will help you to carefully consider all of your options. We start by asking you about your income, what you spend your money on each month, what assets you own and, of course, about your debts. We use this information to work out which solution will allow you to become debt free in the shortest time possible, without adding to your debts and whilst protecting important assets such as your home.
Everyone's personal circumstances are different and for some, our role may simply be to help them understand their entitlements or show them how to communicate effectively with their creditors. For others, more formal debt solutions such as an IVA, Debt Relief Order or Bankruptcy may be appropriate. That's why it's so important to get impartial advice.
Whatever you decide to do, remember to keep making payments to priority debts such as mortgage, rent, utilities, Magistrates Court fines and Council Tax. The consequences of failing to keep up with these payments are much more severe than failing to maintain unsecured debt repayments.
If you need to talk confidentially to someone about debt, there's no need to wait or book an appointment, Debt Advice Foundation’s debt advice helpline is open Monday to Friday 8am to 8pm and Saturday 9am to 5pm on 0800 043 40 50.
See an at a glance summary of the main options open to you or find out more about individual solutions below:
- Individual Voluntary Arrangements (IVAs)
- Debt Management
- Consolidation Loans
- Debt Relief Order
Below are the main features of the most common solutions to debt problems. If you want to know more about any individual solution, click on the solution name.
|IVAs||Debt Management||Consolidation Loans||Bankruptcy||Debt Relief Orders|
|Will my assets, such as my house, be protected?||N/A|
|Is interest frozen?|
|Does it protect me from unsecured creditors such as credit card companies?|
|Will unsecured creditors have to write off some of my debts?|
|Do unwilling creditors have to cooperate?|
|Will creditors stop chasing me?|
|Does the solution last for a fixed period of time?|
|Do advisors have to be professionally qualified?|
|Will I be allowed to continue to spend at my discretion?|