This page contains information about debt solutions available in England, Wales and Northern Ireland. Debt advice in Scotland involves similar but different solutions. Before considering an IVA as a debt solution, please make sure you fully understand the risks involved when entering an IVA.
Our ethos as a charity is to help the ‘can’t pays’ rather than the ‘won’t pays’. This may be a surprise to some, but we rarely come across ‘won’t pays’. Indeed most people who suffer with debt problems have lots of things in common, one of them being that they want to repay the money but can’t.
However, every now and again we come across people who have – usually by taking the wrong advice (“my mate down the pub told me…”) – got it into their heads that they can get away without paying.
They usually only come to us for help when this advice has suddenly backfired in some way; we help by setting them on the right track. Sometimes this is a bit of a jolt for those who’ve been under the misguided impression that they ‘knew’ of a way to avoid debt.
They’ll write it off!
Individual voluntary arrangements (IVAs) are a legal form of insolvency in which creditors agree to write off a percentage of debt in exchange for the client paying back a reasonable pence in the pound return on their commitments.
On occasions in the past IVAs were wrongly advertised, sometimes using the eye-catching phrase: “Your debts written off!”. We still hear from some people who believe that an IVA is there to allow them to get away without paying what they owe.
IVAs are an excellent solution for many and some debt will be written off but only if you make your best offer and adhere to the IVA’s terms and conditions for the duration of the arrangement, around 5-6 years.
That’s a long time to live on a budget, and to get an IVA drafted and approved the client is legally obliged to be open, honest and provide proof of all assets, income and expenditure. We don’t pretend that any form of insolvency is ‘an easy way out’.
Despite some misleading advertising in the past IVAs are only approved if creditors believe that the client has offered the best deal they can. The creditors decide on this.
I’ll just go bankrupt and they’ll get nothing!
For some clients bankruptcy is the best option. It’s often the quickest and cheapest way to get rid of the burden of problem debt. We have a dedicated bankruptcy team that help clients through the process free of charge.
There should be no stigma to going bankrupt – it’s not easy and a very tough decision to make.
We sometimes come across a person who doesn’t fear bankruptcy and in some ways dares creditors to bankrupt them, under the impression that bankruptcy is “nothing”! This game of ‘who will blink first’ can end badly.
Creditors can petition for bankruptcy after they’ve issued a statutory demand.
While this maybe fine for clients in trouble (as, in these cases, the creditors pay the bankruptcy fee) if they have assets, a decent surplus income or are a company director they may find bankruptcy can be life-changing.
As a piece of legislation it’s there to help those who can’t escape problem debt (often through no fault of their own). Bankruptcy can be harsh on those who haven’t taken the correct advice or wrongly believed that they could beat the system.
I’m in hiding…
We’ve blogged before about those who think they can disappear for six years and that they’ll return to a clean credit file and no enforceable debt.
There are problems with this theory; if a creditor decides to issue a county court judgment (CCJ) in your absence then the judgment will stand until it’s paid or the debtor in question enters a formal solution such as an IVA, debt relief order or bankruptcy.
You could run away to Spain for six years and have a clear credit rating when you return but the CCJ will be waiting, with the full power of the courts behind it.
Don’t let debt avoidance backfire on you
We can offer debt help at any time of the day or night to those who need it. Debt is best dealt with head on by taking honest, accurate and impartial advice.
The first step is to admit that you need help. If you take that step, speak to a specialist, and not a mate down the pub.