Debt Write Off – Trick or Treat?
We’ve all seen the adverts on TV that claim they can get your debts written off. Some people receive phone calls, others get letters or text messages from companies that claim they can write off debts – anything from 90% to 100% all due to new government legislation.
Just remember the old saying “if it looks too good to be true, it probably is”.
With an IVA you will usually agree to pay a fixed amount for 60 months, any equity in your property needs to be considered as you will need to look into re-mortgaging to release some of it. Modifications can be put forward and you could be required to make up to 72 monthly payments. Once you have successfully completed your IVA any unsecured debts, which are included in your IVA, will be written off.
With bankruptcy you risk losing any assets and could be required to pay an Income Payment Order for up to three years before being discharged from your debts. Depending on your circumstances, this can change.
Both are forms of insolvency and they should not be considered lightly as they can have serious consequences on your ability to obtain a mortgage, keep any assets or even obtain a bank account.
Filed Under debt advice | Trackback | 6 Comments
DMP vs IVA
Two of the most common debt solutions that our clients opt for are DMPs and IVAs. They are two very different options and many people have to choose between the two.
How do you make such a decision? Here is our handy guide to see what is involved in each plan.
- This is an informal arrangement between you and your creditors
- House could be at risk as creditors can force Bankruptcy or apply to the court to secure the debt against your property.
- Legal action is possible.
- Credits can still make contact with you regarding your debts.
- Creditors can change their minds about the repayment plan at any time.
- Flexible repayment plan.
- Repay all of your debts plus interest and charges.
Individual Voluntary Arrangement
- House is safe as long as you maintain repayments.
- You would usually need a minimum surplus of £100
- Legally binding agreement so creditors cannot pursue any further legal action.
- Creditors can only contact you when sending annual statements
- Once your proposals are approved creditors cannot change their minds.
- Your proposals set out your repayment plan for the duration of the IVA, any reduction must be approved by your creditors.
- Any debt remaining after your IVA is completed is written off.
- You can hold most official employment roles whilst in an IVA that you wouldn’t if you were to go bankrupt.
Filed Under Payplan, debt help | Trackback | 8 Comments
Top tips to cut down your energy bills.
This winter it is thought that hundreds of thousands of families will struggle with their energy bills after seeing a huge hike in the cost of fuel over the course of the summer. A report by the Citizens Advice Bureau has recently suggested that this year those that are the most vulnerable will have to make a choice between either feeding themselves or keeping warm.
This week marks world Energy Saving Week, an initiative that aims to get everyone thinking about their energy usage and look at what they can do to cut down and reduce their bills.
Here are a few tips that we would like to share:
- Leaving your appliances on standby still uses electricity. If you switch them all off at the plug you can save money of your bill.
- Insulating your home can make a big difference to your bills. Lots of energy companies now provide grants to those that are the most vulnerable or struggle to pay their bills to enable them to insulate their homes.
- Switching all of your light bulbs in your house to energy saving bulbs can make a small difference, but a difference none the less.
- By turning your thermostat down by just 1degree you can save 10% on your energy bill.
Although only a few small steps, they can not only save you money but will also make the planet a little bit greener.
We would now like to hear your tips, what do you do to try and keep your bills down? No matter how big or small, we want to know!
Filed Under Budgeting | Trackback | 1 Comment
Am I in a DMP or an IVA?
Time and time again I come across people in a particular plan, who are under the assumption that they are in a completely different plan. In my experience this is down to either miscommunication or misunderstanding. When speaking with a company about a plan, it is extremely important to be 100% sure that you are entering into a plan that you understand and it is with a company that you trust.
Often when people are going through the process of setting up a plan they suffer from “information overload” and things can get confusing when trying to deal with such a stressful situation. Regardless of who you choose to assist you with a plan, you should always take your time and not feel pressured into agreeing to go down one particular route without fully assessing your options.
You need to fully understand the plan that you are entering into if you have any questions, no matter how silly they may seem, then ask! Whether it is your case officer at Payplan or elsewhere, then they should take the time to fully answer all your questions for you and make sure you are ready for the plan that you are about to enter.
If you are already in a plan, it should have been clearly and carefully explained to you from the beginning what plan you are in. However if you are unsure you should always speak to the person in charge of you case, whether that be your case officer at Payplan or your case officer from the provider you are with.
Below is a quick reference guide to the differences of a DMP and IVA:
Debt Management Plan (DMP)
- Informal agreement between you and your creditors
- Debts will be repaid in full
- Agreement will last as long as it takes to repay the debts in full
- Attempts will be made to freeze interest and charges, however this can never be guaranteed
Individual Voluntary Arrangement (IVA)
- Legally binding agreement between you and your creditors
- All interest and charges are frozen
- A typical IVA consists of 60 monthly contributions, however depending on your IVA or possible modifications this can be different
- Once your IVA has been successfully completed any remaining debt will be written off
Filed Under debt advice, debt help | Trackback | 3 Comments
