Debt Advice - Debt Management Services

Debt Managment Plan

A debt management plan is a financial solution that would allow you to make affordable monthly payments to your creditors, without having to borrow any more money. It may be possible to negotiate with your creditors to reduce the monthly payments and freeze interest so that you will be able to clear your debt faster.

A debt management plan would enable you to pay one monhtly contribution to one company who would then distribute the funds amongst your creditors. The debt management plan would last until all of the debt has been paid, however if this length of time is longer than 4 years then an Individual Voluntary Arrangement (IVA) may be the more appropriate option.

If you have unsecured debts of at least £5,000 and have a minimum of £100 disposable income each month then a debt management plan could be an option. Wentworth Financial Services Ltd have linked exclusively with NewTomorrow to provide a debt managment solution suitable to your personal circumstances. Follow the link below to see if we can assist you in a debt management plan.

Full & Final Settlement

A Full & Final Settlement is where a creditor is contacted and asked to accept a lump sum payment as a reduced settlement on an outstanding debt. The level of the reduced settlement is dependent on the creditor, the type of debt and your individual circumstances. By accepting a reduced lump sum payment, the creditor agrees to write off any outstanding debt.

You would need to be able to realise funds of at least 60% of the overall debt, therefore unless you have this available in equity within your home then this option maynot be suitable to you. However if you feel you maybe in this situation and you would like to apply for this option follow the link below.

Individual Voluntary Arrangements (IVAs)

An IVA is a legally binding agreement that enables you to put a proposal to your creditors which, if accepted, will allow you to make one monthly affordable payment usually for 5 years. This solution is available, if you live in England, Wales or Northern Ireland only.

A proposal is drawn up by a licensed Insolvency Practitioner which will contain financial information such as assets and liabilities, together with an income and expenditure assessment. The proposal will state how much disposable income you can pay to the creditors and how this money will be repaid. The proposal is then sent to your creditors for them to consider. A creditors meeting is then held. At the meeting creditors will vote to either accept or reject the proposals. The creditors may suggest changes (or modifications) to the proposal, which you in turn would have to agree with in order for the IVA to proceed.

For an IVA to be accepted, it requires 75% of those creditors who vote at the meeting to approve it. Each creditor gets one vote for every pound they are owed. Once an IVA proposal is approved a supervisor is appointed whose job is to manage the IVA. The supervisor collects in the money and pays it out to the creditors. He also reports to the creditors and the debtor on each anniversary or the arrangement. Once the IVA is completed a certificate of compliance will be issued and the debtor will be discharged from all liabilities within their arrangement. At this point you would no longer have any balance outstanding in respect of the debts.

Wentworth Financial Services have linked exclusively with newTomorrow to offer if suitable an IVA solution to our clients. The minimum criteria for an IVA is at least £15,000 of unsecured debt and at least 3 seperate creditors. A full income and expenditure assessment would need to be carried out before an IVA would be considered, follow the link below to start this assessment.

What else do I need to know about IVAs?

You will have to release 85% of the value within your assets, which may mean downsizing your car or refinancing your home.

Bankruptcy

Bankruptcy is a worst case scenario and will only be considered when all other options have been explored. If you have a negative disposable income and your financial situation is not likely to change then generally you will be recommended to take the Bankruptcy route.

If you would like an experienced opinion regarding your debt problem, please follow the link below and complete your details. NewTomorrow's trained advisers will be able to inform you on the most appropriate solution.